One consistent predictor of team effectiveness is team members’ cognitive ability. For example, the average level of team members’ cognitive abilities in military tank crews, assembly and maintenance teams, and service teams directly predicts their effectiveness. Trait conscientiousness also predicts effective team performance in assembly and maintenance teams and service teams.13

An effective team needs people not only with the technical skills necessary to perform the work but also interpersonal skills, decision-making skills, and problem-solving skills. Team members who demonstrate greater mastery of teamwork knowledge are also those who perform better on their teams. Field data from 92 teams in a U.S. Air Force officer development program revealed that teamwork knowledge increased task proficiency.14 Anyone who is a member of a team fully understands that not all of the work of teams is accomplished in the physical presence of the other group members. What types of work are best performed as a team, in the presence of a team, or independently? Teams are superior to individuals at analyzing information, convergent thinking, and assimilating information. However, teams are worse than individuals at divergent thinking.

Moreover, because teams increase performance pressure and performance anxiety, the performance of well-intentioned team members may be hindered. For experts, the physical presence of the team can be a great benefit, because the presence of others increases motivation to perform, and the expert knows the skill sets required. However, for people who are not experts, the presence of others can hinder performance. Billy Cundiff, a kicker for the 2012 Baltimore Ravens, choked during the final 15 seconds of the AFC championship game against the Patriots. Unprepared and probably a bit confused, Cundiff was rushed onto the field by screaming coaches and teammates in the final minutes of the fourth quarter. He had not missed a fourth-quarter kick all season and had been training himself on the sidelines to regulate his stress levels during the game. However, under such immense pressure to send the game into overtime, Cundiff overthought his “autopilot” actions, botched his kick, and sent the ball traveling wide and to the left of the goal posts, resulting in a loss for his team.15 Choking under pressure occurs when a person’s performance declines despite incentives for optimal performance.16

The physical presence of other people is stimulating, and this greater arousal acts as a motivator on behavior. Whatever we might be doing, we do with more “gusto” when in the presence of other people, especially our team. However, there is a catch: The presence of other people enhances performance for well-learned behaviors (but hinders performance for less well-learned behaviors). Thus, greater arousal or stimulation enhances our performance on tasks that are well learned, but hinders our performance on novel tasks. The presence of other people triggers one of two responses: challenge (if someone is an expert) or threat (if someone is not an expert). Moreover, the cardiovascular responses of people while they perform a well-learned task in the presence of others provide physiological evidence that experts feel challenged—increased cardiac response and decreased vascular resistance.17 However, if people are performing an unlearned task in the presence of others, they go into “threat mode”—increased cardiac response and increased vascular resistance. Consider, for example, what happens to pool players when they are observed by others in pool halls.18 Novice players perform worse when someone is watching. In contrast, expert players’ games improve dramatically when they are observed. Similarly, joggers speed up on paths when someone is watching them and slow down when no one appears to be in sight.19 Additionally, people giving impromptu speeches perform worse in the presence of others than when alone.

Social facilitation is the predictable enhancement in performance that occurs when people are in the presence of others. Social inhibition occurs when people are the center of attention and are concerned with discrepancies between their performance and standards of excellence. Thus, team leaders will actually make the performance of their team suffer if they apply performance pressure to people who are not yet expert.

How can team players ensure that their behavior is the optimal response? There are two routes. Expertise is one way: Experts are trained to focus on what matters most. For example, to combat the problems of overthinking, athletes use mental strategies such as singing, reciting mantras, or, in the case of Olympic swimmer Michael Phelps, using music to pump himself up before races. Before winning his 18th, and final, gold medal in the 4 × 100-meter medley relay, Phelps revealed on Twitter that he psyched himself up by listening to hip-hop artists such as Young Jeezy and Lil Wayne.20 Speed skater Apolo Ohno always yawns before a big race. When asked why by an interviewer, he attributed it not to fatigue, but to a psychological part of his pre-race routine. “I want to be a lion,” he said with a smile.21 And, right-handed athletes improve their performance under pressure simply by activating certain parts of the brain by squeezing a ball or clenching their left hand just prior to competition.22

Practice and rehearsal is another strategy: It modifies the behavioral response hierarchy, so that the desired response becomes second nature. However, being an expert does not completely protect people from choking. Just look at professional players on sports teams. In the championship series in professional baseball and basketball, the home team is significantly more likely to lose the decisive game than it is to lose earlier home games in the series. Why? Expertise is the result of overlearning. The pressure to perform well causes people to focus their attention on the process of performing—the focus of attention turns inward. The more pressure, the more inwardly focused people become. When people focus on overlearned or automated responses, it interferes with their performance.23 It is best to avoid trying to learn difficult material or perform complex tasks in groups, because peer pressure will obstruct performance. However, if team members are experts, they will likely flourish under this kind of pressure. Practice not only makes perfect but also makes performance hold up under pressure. Not all teamwork needs to be done in a team setting; sometimes it is beneficial to allow team members to complete work on their own and bring it back to the group.

At a precise point between boredom with a task and intense pressure is a state that psychologist Mihaly Csikszentmihalyi calls flow.24 See Exhibit 2-2.

Flow is a psychological state in which a person is highly engaged in a task—so interested, in fact, that the person loses track of time, and the process of engaging the task is its own reinforcement. Engagement is critical for flow. Engaged employees are

more productive, more focused on the customer, safer, more profitable, and more satisfied with their jobs. In a typical organization, the ratio of engaged to disengaged employees is 2:1; in highly productive organizations, the ratio of engaged to disengaged employees is 9.5:1. Moreover, a meta-analysis of more than 152 organizations reveals that businesses with a high level of employee engagement have an earnings per share rate that is 3.9 times more than organizations with lower employee engagement within the same industry.25

There is a fine line between challenge and stress. For example, people who strive to accomplish difficult goals may perceive their goal as a challenge, rather than a threat, and perform quite well. Challenge occurs when there is an opportunity for self-growth with available coping strategies; threat is experienced when the situation is perceived as leading to failure with no available strategies for coping. For example, in one investigation, people evaluated companies’ stocks and had to make decisions quickly and accurately.26 The same level of goal difficulty impaired performance and adaptation to change when people appraised the situation as a “threat,” but it improved adaptation to change when people appraised the situation as a “challenge.”

Motivation gains refer to circumstances that increase the effort expended by group members in a collective task. Motivational gains in which the less capable member works harder is known as the Köhler effect.29 A field study of relay swimming at the 2008 Olympics revealed that swimmers performed better (swam faster) when they were late in the relay position, rather than early.30 Those late in the relay apparently saw themselves as indispensable for the ultimate team outcome. The psychological mechanisms underlying the Köhler effect are social comparison (particularly when someone thinks that their teammate is more capable) and the feeling that one’s effort is indispensable to the group.31 Group members are willing to exert effort on a collective task when they expect their efforts to be instrumental in obtaining outcomes that they value personally.32 In particular, the weakest member of a team is more likely to work harder when everyone is given feedback about people’s performance in a timely fashion.33 Although motivation gains gradually start to attenuate, they remain higher when people work with several different partners (as opposed to the same people).34 And, motivation gains were significantly greater when people worked in the physical presence of their coworker (as opposed to the virtual presence).35

A more common observation in groups is motivation losses, also known as social loafing. A French agricultural engineer named Max Ringelmann was interested in the relative efficiency of farm labor supplied by horses, oxen, machines, and men. In particular, he was curious about their relative abilities to pull a load horizontally, such as in a tug-of-war. In one of his experiments, groups of 14 men pulled a load, and the amount of force they generated was measured. The force that each man could pull independently was also measured. There was a steady decline in the average pull per member as the size of the rope-pulling team increased. One person pulling on a rope alone exerted an average of 63 kilograms of force. However, in groups of three, the per-person force dropped to 53 kilograms, and in groups of eight, it plummeted to only 31 kilograms—less than half of the effort exerted by people working alone.36 This detailed observation revealed a fundamental principle of teamwork: People in groups often do not work as hard as they do when alone. This is known as social loafing.

Team performance increases with team size, but the rate of increase is negatively accelerated, such that the addition of new members to the team has diminishing returns on productivity. Similar results are obtained when teams work on intellectual puzzles,37

creativity tasks,38 perceptual judgments, and complex reasoning.39 Social loafing has been demonstrated in many cultures, including India,40 Japan,41 and Taiwan.43 The general form of the social loafing effect is portrayed in Exhibit 2-3.

People’s motivations often diminish in a team. Also, the larger the team, the less likely it is that any given person will work hard. For many team tasks, there is a possibility that others can and will do most or all of the work necessary for the team to succeed. This means that free riders benefit from the efforts of others while contributing little or nothing themselves. Team members are sensitive to how important their efforts are perceived to be. When they think their contributions are not going to have much impact on the outcome, they are less likely to exert themselves on the team’s behalf.

How do teams react once a free rider has been detected? If someone is not contributing, the other team members might attempt to reduce that person’s reward (e.g., not allow someone to put his or her name on the group report if he or she has not contributed) or reduce their own inputs (i.e., the other members of the group might stop working hard). People are more intolerant of free riders whom they perceive as out-group members and are more permissive of in-group members.43 For these reasons it is important to have clear sanctions for free riding in teams. For example, in the NFL, fines are regularly leveled against players for flagrant disruptions to the flow of the game. For example, during the 2011 American football season, fighting carried a minimum $25,000 penalty, as did physical contact with a game official. At the end of the season Pro Bowl, missing a team meeting set a player back $2,000. League fines are often doubled for repeat offenses.44 Meaningful consequences emphasize the team’s core values: showing up and contributing. The leaders of these teams correctly recognize that free riding and social loafing, if unchecked, can be a serious threat to team productivity.

Why do people free ride in teams? Three reasons: diffusion of responsibility, a reduced sense of self-efficacy, and “sucker aversion.”

Suppose you are managing a team that processes insurance claims. Prior to the formation of teams, you measure the average claim processing time and find it to be 3 days. After forming the teams, you find the average has increased to about 9 days. Has your team fallen victim to social loafing? Your manager advises you to immediately dismantle the teams. Someone else tells you that the company’s incentive system needs to be overhauled. What do you think?

Before you dismantle the teams or restructure the company’s entire pay structure, consider the following strategies:

Most teams are too large. As the number of people on a team increases, it is that much harder to schedule meetings, move paperwork, and converge on ideas. The incidence of unanticipated failure increases. As a rule of thumb, teams should have fewer than 10 members and just enough to cover all needed skill areas.

Members need a clear sense of where they are going and how they will get there. If the team does not know where it is going, its efforts will be fragmented and members will waste time and energy.

Team members who train together, as opposed to separately, work more effectively. This is because they have an opportunity to coordinate their strategies. A side benefit of training team members together is that training provides the opportunity to build trust.

Teams are low on the learning curve when the team members begin to work with one another. A team might be motivated and highly skilled but naive in terms of communicating with one another in a highly synchronized and coordinated fashion. Teams require more practice than do individuals.

For most tasks, it is better for team members to directly communicate with the intended recipient, rather than going through others. This becomes a challenge when team members have different status. Ronen Shilo, CEO of Israel’s Conduit, does not want team members to “get all twisted up about level-jumping” and, so, encourages even those who do not formally report to him to put aside the organizational chart and come to him with ideas and issues.78

Every team needs clear performance standards. In the absence of performance standards, it is impossible to evaluate the effectiveness of a team. The most common means by which people are evaluated by organizations is through a performance appraisal, which we discuss in detail in the next chapter. Many performance appraisals are routine and occur on a regular basis. Ideally, they are objective, based upon hard facts, and deliverables. People receive clear and informative feedback about what they are doing well and what they need to work on. We’ve argued that performance appraisals should be used when evaluating team performance.

How does a manager know whether a team is performing effectively? If this question is hard to answer, then it will be difficult to pull together a high-performance team and diagnose problems before they threaten team performance. Furthermore, even if you happen to be in the fortunate position of working on a successful team, unless you understand what makes your team effective, you may make the wrong choices or be indecisive at inopportune times.

Team performance evaluation is more difficult than individual performance evaluation. Teams are harder to track, and higher turnover can blur the relationship between the actions that people take and the results achieved by the team. Nevertheless, it is still possible to do a rigorous performance evaluation on teams, just as it is with individual employees. In this chapter, we consider the factors important to assessing team performance. In the next chapter, we deal with the thornier issue of how to measure performance and structure the incentive system.