When Team Goals Drive Performance (and Why That Might Not be a Bad Thing)

Performance reviews. Two words that spark joy... said no one ever, especially the HR professionals who are deep in process right now. (I'm burning sage for you.)

But what if — instead of the awkward one-on-one dance of KPIs, bell curves, and “development areas” — a team was assessed as a team? No rankings. No solo heroics. Just shared goals, and shared responsibility.

That’s exactly what is being trialled in a property team of someone I spoke with recently, and it really got me thinking (and reacting viscerally).

The brief? Trial a new approach: set some agreed team goals, and at the end of the year, assess everyone collectively. If the team succeeded, the bonus followed. If not — well, no dice.

Naturally, this raised a few eyebrows (and a few cortisol levels - including my own). After all, what happens if one person slacks off? Is it fair to high performers or even promoting high performance because what's the point? How do you measure impact when everyone plays a different role? Is this simplifying what is an important opportunity for individual human-centred recognition and for some the once-a-year conversation that is about the Who instead of the What?

Valid questions.

But here’s the kicker: there's actual evidence backing this approach — and it can be a game-changer when done well. (Argh, I know hear me out. I'm still not sold. Maybe we need some newer research on it, or is that the purpose of this trial?)

Team Goals Work (When the Work Is Actually Teamwork)

Research shows that when the work is interdependent — think complex deals, shared client portfolios, or projects that need ops, strategy, and finance working together — team-based appraisals boost collaboration and accountability.

It’s not just theory either. Studies from organisational psychology (yep, I read them so you don’t have to) show:

• Teams with shared incentives are more likely to collaborate, share knowledge, and solve problems together.
• Collective goals increase psychological safety, especially when people feel safe to say “I need help” without tanking their rating.
• When teams help set their own goals, they’re more committed and see the process as fair — a big tick for motivation (intrinsic motivation - look it up) and engagement.

But Let’s Get Real: There Are Pitfalls Too

If you’re not careful, team-based systems can also breed:

• Social loafing (the nice term for “someone else will pick up the slack”)
• High-performer resentment (“Why am I carrying this again?”)
• Culture Crumble through shared accountability (the oppositive of a "can-do" team attitude when Cassie has spent a month on Facebook marketplace during EOFY and June (pun-intended) has worked 60-hour weeks).
• And good old-fashioned ambiguity if goals are too vague or irrelevant.

Which is why it can’t just be bonuses tied to team outcomes. It has to be part of a bigger system: clear roles, regular feedback, shared learning, and strong leadership that reinforces the why and deals with underperformance promptly.

So What’s the Takeaway?

If you're a leader, HR practitioner, or even a slightly-suspicious team member trying to work out if this is just a sneaky way to save on bonuses — consider this:

Team-based performance works best when the team actually needs each other to succeed.

It won't fix poor leadership. It won't work if goals are just slapped together with buzzwords without team member buy-in. And it sure as hell won’t work without clear communication and psychological safety.

It's essential to complement team-based appraisals with qualitative feedback and 1:1 recognition to retain individual accountability and motivation. I honestly think without this, your not going to be retaining your high performers.

But when done thoughtfully? Maybe it’s a brilliant nudge toward shared purpose, cross-functional magic, and even a more human approach to performance.

Proof will be in the Christmas-in-July 2026 Pudding I think. What is your gut saying about this radical change idea?

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Curious about building better performance conversations — the kind that go beyond tick-boxes and into real impact?

Let’s talk. No pressure, no pitch. Just nitty gritty coaching.

#performance #leadership #teameffectiveness #coaching #peopleandculture #propertyteams

For my evidence nerds - I got you. Check these out for some extra reading:

Campion, M. A., Medsker, G. J., & Higgs, A. C. (1993). Relations between work group characteristics and effectiveness: Implications for designing effective work groups. Personnel Psychology, 46(4), 823–850. https://doi.org/10.1111/j.1744-6570.1993.tb01571.x

Colquitt, J. A., Conlon, D. E., Wesson, M. J., Porter, C. O., & Ng, K. Y. (2001). Justice at the millennium: A meta-analytic review of 25 years of organizational justice research. Journal of Applied Psychology, 86(3), 425–445. https://doi.org/10.1037/0021-9010.86.3.425

DeMatteo, J. S., Eby, L. T., & Sundstrom, E. (1998). Team-based rewards: Current empirical evidence and directions for future research. In J. R. Pearce & R. L. Giacalone (Eds.), Teams in organizations: Recent research on performance and effectiveness (pp. 159–191). San Francisco: Jossey-Bass.

Edmondson, A. (1999). Psychological safety and learning behavior in work teams. Administrative Science Quarterly, 44(2), 350–383. https://doi.org/10.2307/2666999

Guzzo, R. A., & Dickson, M. W. (1996). Teams in organizations: Recent research on performance and effectiveness. Annual Review of Psychology, 47(1), 307–338. https://doi.org/10.1146/annurev.psych.47.1.307

Karau, S. J., & Williams, K. D. (1993). Social loafing: A meta-analytic review and theoretical integration. Journal of Personality and Social Psychology, 65(4), 681–706. https://doi.org/10.1037/0022-3514.65.4.681

Liden, R. C., Wayne, S. J., & Bradway, L. K. (1997). Task interdependence as a moderator of the relation between group performance and satisfaction. Journal of Applied Psychology, 82(5), 745–750. https://doi.org/10.1037/0021-9010.82.5.745

Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist, 57(9), 705–717. https://doi.org/10.1037/0003-066X.57.9.705

Sundstrom, E., McIntyre, M., Halfhill, T., & Richards, H. (2000). Work groups: From the Hawthorne studies to work teams of the 1990s and beyond. Group Dynamics: Theory, Research, and Practice, 4(1), 44–67. https://doi.org/10.1037/1089-2699.4.1.44

Thompson, L. L. (2003). Improving the creativity of organizational work groups. Academy of Management Executive, 17(1), 96–109. https://doi.org/10.5465/ame.2003.9474814

Wageman, R. (1995). Interdependence and group effectiveness. Administrative Science Quarterly, 40(1), 145–180. https://doi.org/10.2307/2393703