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Although advocates of teamwork suggest that teams enhance performance, empirical evidence does not consistently, or robustly, support these claims. Still, a belief in the effectiveness of teams—among managers, employees, and the general lay population—seems very strong. What accounts for this ‘romance of teams’? In this paper, we offer a psychological answer to this question. We review evidence regarding the actual effectiveness of teams, in order to show that teams are not as effective as many believe them to be, and we argue that the romance of teams stems from the psychological benefits of group-based activity. Specifically, we propose that team members experience both social-emotional, and competence-related, benefits, and we review an eclectic mix of research in support of this claim. We argue that these psychological benefits of teams lead people to assume that teams are ‘high performance’, thus, causing the romance of teams. Finally, we discuss potential implications of the romance for organizations, researchers, and employees.