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Decades ago some big organisations introduced teams into their production processes, it made news because no one else was doing it. In today’s organisations, it’s the opposite, a business that doesn’t use teams to at least some extent is the odd one out. 

Evidence suggests that teams typically outperform individuals when the work being undertaken requires multiple skills, judgement and experience. Teams can also be more flexible and responsive to change and facilitate employee participation in decision making. In addition, teams can increase employee motivation. 

So now that teams are an integral part of how businesses operate and achieve their goals, just as we seek to make all parts of our business function effectively, how do we ensure our teams are operating effectively? Firstly what do we mean by team effectiveness? In brief, this includes objective measures of a team’s productivity, manager’s ratings of a team’s performance, and measures of collective member satisfaction. 

The key components of making up effective teams cover four general categories – context, composition, work design and process: 

Context

All work teams rely on resources outside the group to sustain it. These resources can include timely information, proper equipment, adequate staffing, support and encouragement, and administrative assistance. 

Leadership and structure is also important as team members must agree on who is to do what and ensure all members contribute equally. The team needs to determine how schedules will be set, what skills need to be developed, how the group will resolve conflict and how it will make and modify decisions. 

Team members must trust each other and their leader. This facilitates cooperation, reduces the need to monitor other’s behaviour, bonds members and encourages them to be willing to accept and commit to the leader’s goals and decisions. 

Individual-oriented performance evaluation and reward systems must be modified to reflect team performance e.g. group-based appraisals, profit sharing, gain-sharing and small-group incentives. 

Composition

Three different types of skills are required for a team to perform effectively - technical expertise, problem solving and decision making skills, and interpersonal skills. 

Teams that are higher in levels of extraversion, agreeableness, conscientiousness, openness to experience and emotional stability tend to perform better. People should be selected for a team to ensure that all the various role ‘types’ are filled. Individuals often play multiple roles and managers need to understand the individual strengths that each person can bring to a team. 

When a team is diverse in terms of personality, gender, age, education, functional specialisation and experience there is an increased probability that it will perform effectively. 

The most effective teams have fewer than ten members which prevents group think (i.e. agreeing with the consensus rather than putting your true thoughts forward) and mutual accountability, and eases coordinating efforts when time pressure is present. Effective teams have members who can complete each other’s tasks if necessary, making it less reliant on any single member. High performing teams are likely to be composed of people who prefer working as part of a group.