Declining employees’ performance has emerged as part of the criticisms leveled against government hospitals in Nigeria. Perhaps, the problem of employees apathy and lack of effort is not simply a matter of individual laziness, rather there are often healthy reaction by normal people to an unhealthy environment created by uncommon organizational or government policies. This underscores the importance of investing in and developing the positive psychological capacities of organizational members for the benefit of boosting organizational performance and remains competitive. This study therefore examines the relationship between psychological capital and employee performance in Federal Neuro-Psychiatric Hospital in Benin City using survey research method. A sample size of one hundred and twenty two (122) was selected for the study using accidental sampling technique. Data collected were analyzed using Pearson product moment correlation and multiple regression analysis. The study found that there is significant relationship between psychological capital and employee performance in Federal Neuro-Psychiatric Hospital Benin City, Edo State, Nigeria. Requisite conclusion and recommendations were provided in the light of empirical and theoretical findings.
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