Does Team Size impact Happiness of the Team?

Yes. Managers with too many direct reports are likely to have less happy teams.

The value of the team in the workplace

“Alone we can do so little, together we can do so much.” — Helen Keller, American author, the first blind and deaf woman to graduate from college in the US

Our ability to come together into effective groups has been essential to the success of civilizations around the world as far back as our recorded history can take us. From Roman legions and early Chinese bureaucrats to modern-day agile teams in California, the ability to organize and lead ever larger groups has been seen as a marker of success. While there is seemingly no limit to the number of people that can connect and identify with a group, there is a limit to the number of people we can work with and still be effective.

Dunbar’s Number

The theory was proposed by the noted anthropologist, Robin Dunbar [1]. He explains that we can maintain stable relationships with roughly 150 people at most. Taking this to heart, the wildly successful American company, Gore-Tex has gone so far as to limit the number of employees in its buildings to no more than 150 people to ensure shared identity and effective collaboration [2].

Much of the research in these studies has come from WEIRD (Western Educated Industrialized, Rich Democratic) Societies [3] and much of our data comes from much fewer studies in Asian societies. So we conducted our own primary research using the daily feedback provided by Happily Pulse Surveys. We asked, could we measure the impact of team size and its relationship to employee happiness? Would more employees in a team have a measurable impact on happiness?

What is the right team size? How many direct reports should a manager have?

Our hypothesis was, managers with more than seven direct reports are more likely to have team members that are less happy.

We collected data from 381 teams representing 2,263 employees over a period of a year and defined “happy” teams as teams with more than 75% of team members reporting that they are happy while “less happy” are teams that do not meet these criteria.

We studied managers of various team sizes and compared the stated happiness of their teams. Managers with more than seven direct reports are classified as overloaded managers. Teams led by overloaded managers represented 99 of the 381 teams 𑁋 and of those 99 teams, only 18 were happy.

Team happiness under managers who have less than or equal to 7 direct reports

Team happiness under managers who have more than 7 direct reports

According to our data, overloaded managers are 4x more likely to have teams that are less happy.

That doesn’t come as a surprise 𑁋 more direct reports equals more work for a manager and often weaker bonds between teammates. Could we identify the maximum happiness rate for different team sizes and discover the optimal balance between team size and happiness? Our results can be seen in Figure 1 below.

From Figure 1, we can see that teams with up to six members have the potential to achieve a 100% team happiness rate. As team size increases beyond this number, the maximum team happiness rate decreases.

Figure 1. Team size vs. maximum team happiness

So what is the ideal team size?

Our results and research suggest that six is the ideal team size. Research by Maximilien Ringelmann suggested that productivity would drop off progressively as teams exceed six people due to decreases in accountability and free-rider problems as seen below [4].

Ringelmann Effect — credit: https://pt.slideshare.net/ellaabyou/ringelmann-effect/12

This is somewhat intuitive for those who have led large teams. Evan Wittenberg, Director of the Wharton Graduate Leadership Program states. “Team size is not something that we think about, but we know it’s important and five or six is about the right number.” [5]. We know that the more direct reports we have, the more time-consuming it becomes to check in and support individual team members, imagine having weekly touch-bases with 15 direct reports, think about the paperwork alone!

Other factors to consider

There are many other factors to consider that influence team performance and productivity: type of task, the complexity of workflows, clarity of goals, effective staffing, placement, etc. [5], [6]

The quality of the manager is a very important consideration when determining how large a team can be. According to Jim Harter, Chief Scientist of Workplace Management and Well-Being at Gallup explains, “while team size 𑁋 and other team dynamics 𑁋 can influence engagement, the most important factor is the quality of the manager or team leader.” [7].

Happy team = Happy work

What we know is smaller teams are generally better. They make the manager’s job simpler, improve accountability, and reduce free-rider problems among individual contributors, making everyone feel happy and feel their work is more valuable because they play a bigger role.

We also know that it’s simply not practical for many organizations to restructure their teams into optimal groups of 6, so we must upskill our managers instead. The time-tested and true way to ensure managers learn the skills to manage those teams has been training and mentorship, both of which take time and cost money.

Happily is a one-of-a-kind platform that drives unprecedented feedback, recognition, insights, coaching, and more. Visit our website to learn more, request a demo, and be on your way to unlocking your team's talent and happiness!