Four contextual factors appear to be most significantly related to team performance. These factors include adequate resources, leadership and structure, a climate of trust, and performance evaluation and reward systems.

As part of the larger organization system, a team relies on resources outside the group to sustain it. If it doesn’t have adequate resources, the team’s ability to perform its job effectively is reduced. This factor appears to be so important to team performance that one research study concluded that effective work groups must have support from the organization.34 Resources can include timely information, proper equipment, encouragement, adequate staffing, and administrative assistance.

If a team can’t agree on who is to do what or ensure that all members contribute equally in sharing the workload, it won’t function properly. Agreeing on the specifics of work and how all the team members’ individual skills fit together requires team leadership and structure. This aspect can come from the organization or from the team itself. Even in self-managed teams, a manager’s job is to be more of a coach by supporting the team’s efforts and managing outside (rather than inside) the team.

Members of effective teams trust each other. And they also trust their leaders.35 Why is trust important? It facilitates cooperation, reduces the need to monitor each other’s behavior, and bonds members around the belief that others on the team won’t take advantage of them. Trusting the team leader is also important because it means the team is willing to accept and commit to the leader’s goals and decisions.

The final contextual factor of an effective team is a performance evaluation and reward system. Team members have to be accountable both individually and jointly. So, in addition to evaluating and rewarding employees for their individual contributions, managers should consider group-based appraisals, profit-sharing, and other approaches that reinforce team effort and commitment.

Several team composition factors are important to a team’s effectiveness. They include team member abilities, personality, role allocation, diversity, size of teams, member flexibility, and member preferences.

Part of a team’s performance depends on its members’ knowledge, skills, and abilities.36 Research has shown that to perform effectively, a team needs three different types of skills. First, it needs people with technical expertise. Next, it needs members with problem-solving and decision-making skills. Finally, a team needs people with interpersonal skills. A team can’t achieve its performance potential if it doesn’t have or can’t develop all these skills. And the right mix of these skills is also critical. Too much of one at the expense of another will lead to lower team performance. However, a team doesn’t necessarily need all these skills immediately. It’s not uncommon for team members to take responsibility for learning the skills in which the group is deficient. That way a team can achieve its full potential.

As we’ll see in the next chapter, personality significantly influences individual behavior. It’s also true for team behavior. Research has shown that three of the Big Five dimensions—a theory we’ll discuss in Chapter 11—are relevant to team effectiveness.37 For instance, high levels of both conscientiousness and openness-to-experience tend to lead to higher team performance. Agreeableness also appears to matter. And teams that had one or more highly disagreeable members performed poorly. Maybe you’ve had that not-so-good experience in group projects that you’ve been part of!

Nine potential team roles have been identified. (See Exhibit 10–7.) High-performing work teams have people who were selected to fulfill these roles based on their skills and preferences.38 On many teams, individuals may play multiple roles. It’s important for managers to understand the individual strengths a person will bring to a team and select team members with those strengths in mind to ensure that these roles are filled.

Exhibit 10–7

Team Member Roles

Team diversity is another factor that can influence team effectiveness. Although many of us hold the optimistic view that diversity is desirable, research seems to show the opposite. One review found that “Studies on diversity in teams from the last 50 years have shown that surface-level social-category differences such as race/ethnicity, gender, and age tend to . . . have negative effects” on the performance of teams.39 Some evidence does show that the disruptive effects of diversity decline over time, but evidence does not confirm that diverse teams perform better eventually.

What size should a work team be in order to be effective? At Amazon, work teams have considerable autonomy to innovate and to investigate ideas. Jeff Bezos, founder and CEO, uses a “two-pizza” philosophy; that is, a team should be small enough that it can be fed with two pizzas. This “two-pizza” philosophy usually limits groups to five to seven people, depending, of course, on team member appetites!40 Generally speaking, the most effective teams have five to nine members. And experts suggest using the smallest number of people who can do the task.

Team member preferences need to be considered. Why? Some people just prefer not to work on teams. Given the option, many employees will opt not to be part of a team. When people who would prefer to work alone are forced on a team, it creates a direct threat to the team’s morale and to individual member satisfaction.41

Effective teams need to work together and take collective responsibility for completing tasks. An effective team must be more than a “team in name only.”42 Important work design elements include autonomy, using a variety of skills, being able to complete a whole and identifiable task or product, and working on a task or project that has a significant impact on others. Research indicates that these characteristics enhance team member motivation and increase team effectiveness.43

Five team process variables have been shown to be related to team effectiveness. These include a common purpose, specific team goals, team efficacy, managed conflict, and minimal social loafing.

An effective team has a common plan and purpose. This common purpose provides direction, momentum, and commitment for team members.44 Members of successful teams put a lot of time and effort into discussing, shaping, and agreeing on a purpose that belongs to them both individually and as a team.

Teams also need specific goals. Such goals facilitate clear communication and help teams maintain their focus on getting results.

Team efficacy emerges when teams believe in themselves and believe they can succeed.45 Effective teams have confidence in themselves and in their members.

Effective teams need some conflict. Conflict on a team isn’t necessarily bad and can actually improve team effectiveness.47 But it has to be the right kind of conflict. Relationship conflicts—those based on interpersonal incompatibilities, tension, and autonomy toward others—are almost always dysfunctional. However, task conflicts—those based on disagreements about task content—can be beneficial because they may stimulate discussion, promote critical assessment of problems and options, and can lead to better team decisions.

Have you ever been part of a class group in which all teammates received the same grade, even though some team members didn’t fulfill their responsibilities? How did that make you feel? Did it create conflict within the group, and did you feel that the process and outcome were unfair? Recent research also has shown that organizational justice or fairness is an important aspect of managing group conflict.48 How group members feel about how they’re being treated both by each other within the group and by outsiders can affect their work attitudes and behaviors. To promote the sense of fairness, it’s important that group leaders build a strong sense of community based on fair and just treatment.

Finally, effective teams work to minimize the tendency for social loafing, which we discussed earlier in this chapter. Successful teams make members individually and jointly accountable for the team’s purpose, goals, and approach.49