Bozen – Virtual teams differ in several ways from traditional collocated work teams, mostly because of the distance between their members and their reliance on digital communication technology. Global virtual teams (GVTs), regardless of their size and purpose, have become a preferred form of collaboration for successful organizations in today’s global economy. According to a study conducted by RW3 CultureWizard, collaboration in GVTs grew from 64% in 2010 to 89% in 2020. Thus, 89% of corporate employees are involved in at least one GVT. Owing to the COVID-19 pandemic, the importance of virtual teams has increased even further. As international travel came to a halt and organizations across sectors sent millions of employees to connect virtually from their home offices with their local and international colleagues, GVTs made it possible to maintain international business activities.
Virtual teams provide numerous advantages
In addition to being a necessity in times of restricted travel and congregation in large numbers in workspaces, GVTs provided numerous advantages to organizations prior to the pandemic. These include the availability of the most skilled individuals regardless of geographic boundaries; the possibility of a 24-hour workday, and the maximization of the quality of decisions, all without travel expenses. Nevertheless, due to their specific nature, GVT members face additional challenges not experienced in co-located teams. One source of difficulty in GVTs lies in the spatial and temporal dispersion of team members. To ensure successful collaboration, GVTs must rely on technology rather than personal communication to pool their resources and coordinate their activities.
Satisfaction-performancerelationship: the Holy Grail
It is commonly known that satisfied employees are happy employees and thus perform better. This satisfaction–performance relationship is described as the “Holy Grail” of organizational behavior, reflecting the importance of the linkage. Thus, making sure that the employees working in GVTs are satisfied becomes a crucial task for company management. While satisfaction cannot be commanded or trained, it is important to understand which team processes and team member characteristics are associated with satisfaction or dissatisfaction.
Thereby, it is important to consider that satisfaction can appear both at the individual level as the individual satisfaction with the team and at the team level as team satisfaction that reflects the team members’ attitudes toward their work unit and their willingness to continue working together over time. Consequently, the more satisfied team members are, the more likely they are to show higher performance and team commitment. The same applies to performance, which can also appear both at the individual level as the performance of an individual and at the team level as the performance of the whole workgroup.
While the satisfaction-performance relationship has been confirmed for traditional face-to-face teams, it has not been thoroughly examined in the context of GVTs. Thus a study published in the Journal of International Business Research analyzed the data of 2,756 participants working in 689 teams across 80 nationalities. The objective of the study was to examine whether individual satisfaction and team satisfaction influence the performance of individual team members and the entire GVT.
Satisfaction increases performance
The results of the study show a positive relationship between satisfaction and both individual and team performance. That means that if a virtual team member is satisfied (individual satisfaction), both his or her individual performance as well as the performance of the whole team increases. Therewith, the findings suggest that the satisfaction–performance relation, which has been shown to exist for traditional teams, also applies to GVTs.
More interestingly, the study found that increased individual satisfaction with the team’s effort and performance (team level satisfaction) is negatively associated with individual performance in GVTs. That is, an individual who is satisfied with his or her team may perform at lower levels than an individual whose satisfaction with his or her team is lower. In other words, if one is very satisfied with the team’s effort and performance, one may decide to exert less effort as one believes that others in the team are doing a good job. This negative relationship can be explained by the free-riding effect, which can often be observed in daily teamwork.
Implications for Management and Practice
Most importantly, the study demonstrates that the team itself, resulting in its members’ satisfaction, is a crucial factor in individual and team performance. Therefore, attention should be paid to team composition and the overall satisfaction of team members. Regular discussions with team members on their satisfaction are necessary; however, helping GVTs to establish norms and values supporting their well-being is crucial.
Given free-riding in GVTs and its negative effects on individual performance, it is necessary to ensure that the incentives for the teams are set in a way that individual performance also matters. Thus, a careful design of performance measures for GVTs is essential to avoid the free-riding problem, which is amplified in the virtual context.
As GVT members typically never meet face-to-face, the only mode of interaction and keeping members interconnected is via technology-enabled communication channels. Hence, successful virtual teams have been shown to communicate more frequently than traditional teams. Thus, the management of organizations should pay attention to allowing sufficient time and possibilities for exchange among team members. Naturally, members’ motivation is essential for their performance. For this, the management has various possibilities to enhance the willingness of individuals to engage in their work and achieve professional goals, ranging from team-building seminars to specific incentive systems rewarding teamwork.
Technologically skilled team members, who can cope with technological uncertainty and technology-related challenges, develop higher levels of trust in each other than unskilled virtual team members. To overcome these challenges, managers may want to think about offering technical training and seminars on team-building, which may increase the trust between the team members.
Conflicts and cultural differences can have both positive and negative effects on GVTs. As such, conflict can have constructive effects on teams, such as creating creativity or supporting team development, but it can also lead to dissatisfaction and ineffective teamwork. Cultural diversity has been shown to aid innovation, creativity, and problem-solving, but it can also hinder social integration among team members. However, these adverse effects may be mitigated by conflict management training as well as understanding and accepting the differences. In doing so, the challenges and problems resulting from cultural differences can be overcome and solved.
Thus, when working with GVTs, special attention of the Human Resource Management of the organization should be placed on the selection of the members, the reward systems, as well as training programs supporting the satisfaction of the team members as that has positive effects on the performance of the entire GVT.
Katharina Gilli and Marjaana Gunkel
Gilli is a PhD candidate in Management and Economics at the Free University of Bozen-Bolzano. She is doing her doctorate under Prof. Michael Nippa on the topic of leadership and digital transformation.
Gunkel is a Professor of Organization and Human Resource Management and Dean of the Faculty of Economics and Management at the Free University of Bozen-Bolzano. Her research concentrates on cross-country comparisons of management practices with a special focus on human resource management and organizational behavior.