“Teamwork makes the dream work,” may sound like a trite phrase you’d see on a break room poster. And yet, there’s a lot of truth packed into that simple statement.
Team performance is both the foundation and the fuel of your business; it becomes the backbone of your work environment and inspires the momentum of progress. Knowing how to hire for, evaluate, and improve team performance can bring greater stability and success to the efforts of your organization.
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What is team performance?
Team performance refers to how effectively a group of individuals works together to achieve shared goals. It’s not just about output or productivity; it’s about how well a team aligns, collaborates, and sustains results over time.
High team performance combines three critical elements:
- Results: The team consistently meets or exceeds goals, deadlines, and quality standards.
- Process: Members communicate clearly, coordinate effectively, and use systems that support efficient work.
- Health: The team operates with trust, accountability, psychological safety, and shared commitment.
A truly high-performing team doesn’t just deliver outcomes. It maintains clarity of roles, adapts to change, resolves conflict constructively, and remains aligned with the organization’s broader mission.
When these elements work together, performance becomes sustainable — not situational. Teams don’t rely on short bursts of effort or individual heroics. Instead, they operate with consistency, cohesion, and collective ownership.
The importance of effective teams
Why Team Performance Matters
Team performance shapes far more than output. The way people work together influences everything from day-to-day productivity to long-term culture and retention.
Strong teams help organizations:
- Strengthen company culture: Effective teams communicate well, take ownership, and collaborate in ways that support innovation.
- Reduce friction and execution blockers: The right mix of skill, personality, and environment makes it easier to get work done with fewer handoffs and bottlenecks.
- Improve communication and decision-making: Teams perform better when employees can brainstorm without judgment and exchange feedback on wins and losses.
- Boost recruiting and retention: High-functioning teams create a healthier workplace, and a strong culture is a major factor in whether people stay.
Culture impacts retention directly: An SHRM survey found that 90% of workers who rate their culture as poor have considered quitting, compared with 32% who rate their culture as good.
As HubSpot CEO Brian Halligan puts it, “The number one muscle to flex in hiring is culture.” Team effectiveness doesn’t just increase productivity — it makes your organization a place people want to join and stay.
Top 3 tips for improving team performance
So, how do you improve team performance to get teams to work for you? It takes a strategic approach, effective leadership, and an in-depth understanding of team dynamics.
The approach you’d take to improve your sales team’s performance is different from how you would motivate your IT department, although there are some commonalities. The team’s goals and challenges should inform your specific strategy to improve performance, but the following tips are effective for any team:
1. Encourage open communication.
Employees who feel that they are listened to will be happier, more loyal, and more likely to offer valuable insights and feedback. The confidence to communicate freely helps establish a sense of belonging, which leads to feeling more ownership in the outcome of a role or project. Ask employees for feedback, be open to their ideas, and communicate honestly and authentically.
2. Build workplace confidence.
Employees with workplace confidence are unburdened by the fear that accompanies self-doubt and are, therefore, more likely to participate in brainstorming sessions or get involved in the constructive conflict that occurs during a team’s decision-making process. Avoid micromanaging employees and recognize or reward hard work as often as possible.
3. Be intentional about team building.
It’s impractical to throw random employees together and expect harmony and cohesion. The strongest teams are built strategically. Consider competencies, traits, and personality types on an individual level before creating a work group. Research suggests that a mix of trait similarities and differences can enhance outcomes, particularly when building cross-functional teams.
How to measure team performance
Team performance is easiest to evaluate when you measure both what gets done and how the team works together. A few common indicators include:
- Goal achievement: Progress toward objectives, milestones, and deadlines
- Productivity: Output volume and consistency (tasks completed, projects delivered, revenue generated, etc.)
- Quality of work: Accuracy, reliability, and whether deliverables meet expectations
- Collaboration and communication: How well the team coordinates, shares information, and resolves issues
- Feedback and engagement: Insights from 1:1s, surveys, and stakeholder feedback on morale and clarity
- Innovation and improvement: New ideas, process improvements, and efficiency gains over time
Using a mix of quantitative metrics and qualitative feedback gives you a more complete view of how the team is performing.
What makes a high-performing team?
The qualities that define a high-performing team may vary depending on the goals of the team or your organization. However, some predictors of high performance include:
- A clear delineation of roles
- Transparent feedback systems
- Achievable benchmarks and metrics
- Alignment with the company mission
- Equitable divisions of labor
- Individual and/or collective autonomy to get work done
- Communication tools that enhance the team’s capabilities
- Project management tools that enable collaboration
Trust, employee engagement, and open communication are all critical aspects of team performance management, especially with the rise of remote work. Here at The Predictive Index, we credit a concept called the Trust Triangle with the success of our own high-performing teams.
The role of strong team players
Employing strong team players greatly increases your chances of building a high-performing team, but that’s not always easy to do. This process starts with recognizing the qualities of a great team player during the hiring process. Although there are many hallmarks of a good team player, those that pay off the most tend to tie back to one’s ability to support their team and facilitate healthy collaboration. These traits include:
- Adaptability
- Active listening
- Problem-solving
- Effective communication
- A positive attitude
Employees who have an instinct to build others up and make their jobs easier tend to perform well on work teams.
Intellectual capacity is another indicator of being a strong team player. People who like to think, learn, plan, and execute ideas are often high achievers who will have the confidence to communicate and collaborate with a wide range of people. They’re also likely to have critical thinking skills that will make them an asset to a group.
What is the role of leadership in team performance?
Team leaders who are interested in how to develop strong team players should focus on doing the following:
Take your time.
Properly assessing each member of the team can take a while, but is an effort worth undertaking. Figure out which team members are in a role that they’re naturally wired to do both behaviorally and cognitively. If a team member isn’t a good fit, consider moving them to a different team or deciding if they’d benefit from training.
Communicate.
Communication continues to come up for a reason: It’s one of the most important elements of building a strong team. Transparency helps get everyone on the same page, and ensures team members have the information they need to do their job effectively.
Set goals.
Having short- and long-term goals to achieve helps set clear expectations about the job at hand, and gives teams something to work toward together.
Celebrate.
Recognizing and rewarding the successes of individuals and the team as a whole keeps teams inspired and improves morale. Knowing that management notices and cares about their progression and success can motivate team members to continue to achieve goals.
Benchmark assessments for team performance
Sales or production metrics are two popular ways to evaluate team performance, but they’re not applicable to every type of team and may not provide a big-picture perspective of performance.
The most important part of assessing performance lies in knowing how to set goals your team can achieve. The right goals can challenge and inspire your team, contribute to company benchmarks, and bring people together in an effort to work toward a solution.
When everyone understands the objectives and the importance of those goals, they’ll be more likely to feel invested in the work and its outcome.
Reasons teams underperform
There are many different reasons that a team may underperform despite having a target to work toward, including:
- Poor communication
- Ineffective leadership
- Low employee engagement
- Lack of motivation
- Poor job fit
- Lack of formal training
When a team is routinely underperforming, evaluate whether or not it’s a dysfunctional team. If you notice this team consists of people who are acting without informing affected parties, making top-down decisions based on seniority, or creating artificial harmony where everyone’s always “doing great,” there may be bigger issues at hand.
If you suspect that your team is dysfunctional, explore the following possibilities:
- Where does the lack of trust stem from?
- Is the issue primarily with leadership?
- Is there a lack of clarity around roles and responsibilities?
- Are team dynamics fraught with bias and favoritism?
A team alignment session may be necessary to adapt how you lead, realign operations, and re-engage your employees.
It’s also important to implement a performance rating scale to evaluate individual employees. As you work toward establishing an objective way to measure employee performance, start by doing the following:
- Assess who is in the top 25% of performance.
- Identify the best of the best within that group.
- Sort through the remaining 75% and decide who needs a performance improvement plan, who may need additional training or a new role, and who is performing at an average level.
Setting clear goals, evaluating how a team works together, and developing a deeper understanding of each individual employee can all help assess the overall performance of a work group.
How PI can help support team performance
Team performance consists of many different components. Hiring the right people for the right roles, inspiring employees to do their best work, designing teams strategically, and sustaining engagement are all important elements that require different levels of skill, strategy, and knowledge.
As a talent optimization platform, The Predictive Index has all of the tools that you need to build cohesive, collaborative, and successful teams.
PI’s Behavioral science allows you to understand candidates far beyond what’s listed on their resume. Automatically sort candidates based on the highest predictors of job performance to keep your efforts focused, and streamline the interview process with custom questions that probe for specific gaps between the candidate and the job’s requirements.
The Predictive Index also makes it easier to improve leadership and build relationships that thrive. Use behavioral data to get instant recommendations about how people work together, and learn how to build emotional intelligence and facilitate more effective conversations as a leader. Teams that trust management to listen and act upon their feedback are more likely to feel comfortable, confident, and invested in their work.
Our team assessment tool helps you build strong teams in three steps:
- Know yourself: Take the six-minute PI Behavioral Assessment™ to learn how you work best and how you influence your team.
- Know your team: Invite team members to take the assessment, and discover your team’s collective strengths and weaknesses.
- Know your strategy: Identify misalignment between the team’s abilities and its goals, and get recommended actions to close the gap and achieve success.
From hiring the right people to building winning teams, use The Predictive Index to level up your organization, empower your people, and build a positive and productive work environment.
