Summary
Gossip is a behavior that has been traditionally viewed as harmful in organizations. However, a more balanced perspective has emerged in recent years that suggests gossip can have important benefits. We propose that one way to uncover potential benefits of gossip in teams is to focus on the valence (positive or negative nature) of the gossip. Drawing on expectancy theory, we propose team gossip indirectly influences team performance through social loafing because it plays a key role in shaping beliefs about effort in team contexts; effects determined by team gossip valence. We hypothesize that positive team gossip decreases social loafing, whereas negative team gossip increases it. In turn, we expect that through social loafing, positive team gossip has a positive indirect effect on team performance, whereas negative team gossip has a negative indirect effect. We test these predictions in a sample of 63 self‐managing teams. We find support for our predictions regarding positive team gossip but not regarding negative team gossip. Our findings point to the potential benefits of gossip and highlight why efforts to abolish gossip in organizations may impair team effort and performance.