How well a team performs will depend on how effectively it achieves its goals, and on how efficiently it uses its resources. It involves how well the team meets (or exceeds) expectations about its assigned charge at work. There is no one single measure of team performance; everything depends on the context of the team. For example, for a sales team, performance can be measured according to how much of their product or service they have sold within a month. In a manufacturing team, performance can be measured according to how many products were devised in a period of time and how many errors were conducted during the manufacturing process. For an IT project team, performance might be judged according to the project being delivered on time, within the budget and according to technical specifications. For a retail team, measures of performance can include customer satisfaction.

The extent to which employees are developing their skills in a way that is beneficial to them individually whilst enhancing team and organisational performance can also be viewed as a performance outcome of a team. Skill development, according to West and Markiewicz (2004) is linked to employee motivation because employees will feel that the organisation is investing in them, enabling them to perform their jobs more efficiently and allowing them to learn from other members. When we find ourselves in monotonous, mundane and repetitive jobs we are usually much less happy in comparison to when the job provides a challenge and opportunities for learning. In that regard, West and Markiewicz (2004) maintain that when teams are functioning effectively and individuals are learning from their experiences, then absenteeism and turnover decrease whereas job satisfaction increases.