Clause Langfred of Washington University found a situation in which trust actually hurts team performance: when team members of a self-managed team trust each other so much, they don't track each others' progress.
People who know their work is being "monitored" in some way tend to perform better. If they have to work closely together to accomplish their daily tasks, it's easy for everyone to know how someone is doing, including their manager. Obviously, a traditional manager-led team has a fair amount of monitoring from the manager. But self-managed team members who have a lot of freedom in their individual jobs only get monitored if their teammates make an effort to do so. If teammates don't trust each other, that will happen, of course. But, Langfred thought, team members with a lot of trust might be hesitant to monitor each other. They might worry that "a suggestion to monitor fellow team members could be perceived as a violation of trust itself, leading to anger, hurt, and fear…" Langfred writes. "Factors such as the desire to be perceived as a 'team player' and to conform, the fear of sanction or punishment, and concern for the feelings of fellow team members" might combine to keep members from suggesting that the team track individual effort.
He tested his theory using 71 four-person teams of MBA students working together on projects on which they were judged by instructors and outside experts. He used questionnaires in which members rated their teams on trust, individual job freedom ("autonomy"), and monitoring within the team. Then he compared those ratings to the team's project scores.
As expected, the higher the trust on these teams, the lower the amount of monitoring. More to the point, teams with a lot of autonomy and high levels of trust also had low monitoring—and, yes, they did not perform as well.
As Langfred puts is, "some monitoring of individual team members needs to be in place if process loss and coordination errors are to be avoided." But to coordinate, you have to have a good feel for what your team members are doing and how that work is coming along. If you are reluctant to get this information because you "trust" that person, or are afraid they will think you don't trust them, you can't coordinate. "The practical implication is essentially that a lack of monitoring can be naïve, regardless of levels of trust, and that a little skepticism never hurt anyone—or any team," Langfred writes. Source: Langfred, C. (04), "Too Much of a Good Thing? Negative Effects of High Trust and Individual Autonomy in Self-Managing Teams," Academy of Management Journal: 47(3): 385.