Demands for more robust designs in organizational research have led to a steady increase in the number of longitudinal studies in organizational psychology (OP) journals. Similarly, the number and ways to analyze longitudinal data have also increased. In this paper, we adopt a relatively new and promising approach to help researchers analyze their longitudinal data in OP, namely latent transition analysis (LTA). We present a simplified guideline on LTA and discuss its role for OP researchers. Moreover, we demonstrate how organizational scholars can use this method with a practical example. In this example, we investigate (a) if there are qualitatively distinct subgroups of employees based on particular patterns of psychological capital (PsyCap) dimensions (i.e., efficacy, hope, resilience, and optimism), (b) if employees stay in these subgroups or transition to other groups over time, and finally, (c) if leader-member exchange (LMX) is associated with this transition. We use LTA to examine these steps in a German sample (N = 180).