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Research shows that individuals in larger teams perform worse than individuals in smaller teams; however, very little field research examines why. The current study of 212 knowledge workers within 26 teams, ranging from 3 to 19 members in size, employs multi-level modeling to examine the underlying mechanisms. The current investigation expands upon Steiner’s (1972) model of individual performance in group contexts identifying one missing element of process loss, namely relational loss. Drawing from the literature on stress and coping, relational loss, a unique form of individual level process, loss occurs when an employee perceives that support is less available in the team as team size increases. In the current study, relational loss mediated the negative relationship between team size and individual performance even when controlling for extrinsic motivation and perceived coordination losses. This suggests that larger teams diminish perceptions of available support which would otherwise buffer stressful experiences and promote performance.

As work-groups become more widespread within organizations (Hackman, 2002), interest has also grown in designing effective teams whose productivity can be linked to long term competitive advantage (Levine & Moreland, 1998). As prior research has found that team performance is some derivation of combined individual performance (Steiner, 1972), researchers have shown much interest in better understanding factors that can influence individual performance in team contexts. One set of factors involves the structural variants related to the team itself. For example, a large body of classical psychological research has shown that team size can have important consequences for individual performance (Thomas & Fink, 1963), revealing an intriguing paradox regarding individual behavior in the context of larger teams. Namely, while individuals in larger groups have access to more resources (Hare, 1952), including a higher likelihood that one person in the group will remember an important piece of information (Horowitz & Bordens, 2002), individuals on larger teams also expend less effort (Latane, Williams, & Harkins, 1979), engage in fewer differentiated tasks, assume less responsibility for the tasks (Wicker & Mehler, 1971), and generally perform worse than individuals on smaller teams (Liden, Wayne, Jaworski, & Bennett, 2004). In sum, although greater human resource capital is available in larger teams, research has unexpectedly shown that individuals in larger teams perform worse (Hackman, 2002 and Thompson, 2003). Most of the studies that inform our understanding regarding why individuals in larger teams perform worse were conducted in the laboratory. These studies tended to involve relatively simple tasks where members experienced temporary person-group relationships rendering the generalizability of these studies to teams of workers engaging in complex tasks over time somewhat questionable. The main body of field work that demonstrates a relationship between team size and performance has primarily focused on team (as opposed to individual level) performance (Stewart, 2006), and has examined team size as a control variable (Haleblian & Finkelstein, 1993), and with few exceptions (Liden et al., 2004), has generally not examined a cross-level perspective showing the processes through which team size might influence individual performance. A cross-level focus in the domain of team size research is critical because the literature shows that team size often positively relates to group level performance (Stewart, 2006), but negatively relates to individual level performance ( Kerr and Bruun, 1983, Liden et al., 2004, Mullen, 1983 and Thomas and Fink, 1963). These findings mirror the Latane et al. (1979) observation that collective performance may increase as group size increases, but this collective increase is less than the sum of individual optimal efforts. In other words, the diminished performance in larger teams is often not observable at the team level and tends to occur at the individual level. Hackman (2002) suggests that one way to expand what we know about phenomenon involves exploring a level beneath, and bracketing where the bulk of unexplained variance operates. Hence, the current study brackets the cross-level of analysis (team size to individual level performance) where the bulk of unexplained variance associated with poor performance occurs in larger teams. This focus allows for the discovery of new and important types of individual level processes which may account for lower levels of performance in larger teams; processes which are obscured when focusing on the group level of analysis ( House et al., 1995 and Klein and Kozlowski, 2000). Building on a prominent theoretical perspective – Steiner’s theory of process loss (1972) – I explore why individuals in larger teams in real-world work contexts perform worse than individuals in smaller teams. Steiner suggested that individuals in larger teams perform worse because they experience lower levels of coordination and motivation. However, Steiner’s original theory was developed to explain the performance of individuals working in groups engaged in single time as opposed to repeated task interactions. As such, the classical conception of team task design is very different from the modern concept actually implemented in real-world organizations, where team members work together in some cases for years, and tend to spend a great deal of time together on a daily basis. Because research shows that interpersonal relationships commonly develop when people work interdependently over time (Reis, Collins, & Berscheid, 2000), and that supportive relationships have important implications for individual level performance (Madjar, Oldham, & Pratt, 2002), the questions remains whether in real world contexts, relationships play an important role in explaining individual level performance in larger teams. Specifically, there may be process losses due to relational losses-individuals in larger teams perceive that support is less available in the team. Hence, the current paper expands the theory of group size and performance by identifying that individuals in larger teams also experience relational loss, and this additional source of process loss contributes uniquely to poor individual performance. Understanding which individual level experiences best explain the relationship between team size and individual level performance can add to our understanding of how individuals might better use the greater resources available in larger teams. Based on current theory and research, one might infer that in larger teams the best individual performers should simply minimize the amount of time spent coordinating and increase time spent working on individual tasks to avoid coordination and motivation losses (Hackman, 1987 and Steiner, 1972). However, the current paper will suggest that even if a person were to follow these recommendations he still might perform worse in large group contexts. This can be attributed to individuals in larger teams also experiencing relational loss which has important consequences for individual performance.

This study identifies that, in modern contexts, coordination losses and motivation losses provide an incomplete story in explaining why individuals in larger teams perform worse. Instead, the current study shows that relational losses play an important role in explaining why individuals experience performance losses in larger teams. Better understanding of process in larger teams moves the field past an obsession with finding the “optimal team size,” a line of questioning which has yielded little understanding about performance in larger groups. Indeed, the optimal team size may be completely dependent upon the exact nature of the group task which may have as many variations as there are teams (Levine & Moreland, 1998). Focusing on process also moves the field past blanket recommendations to simply keep group sizes small. The reality is that managers tend to bias their team size towards overstaffing (Cini, Moreland, & Levine, 1993), and theory would suggest that larger teams have more potential productivity that can lead organizations to increased competitive advantage if managed correctly (Eisenhardt and Schoonhoven, 1990 and West and Anderson, 1996).