We present evidence from a field experiment to evaluate the effects of team incentives. We compare three common incentive schemes: piece rates, interim feedback, and tournaments, and analyze behavioral responses along two margins: how workers sort into teams, and effort within the team. A theoretical framework makes precise that increasing the strength of incentives can lead high ability workers to prefer to form teams with similarly skilled colleagues instead of workers they are socially connected to. However, if socially connected workers are better able to overcome free-riding within teams, the increased strength of incentives that changes team composition can reduce the firm’s average productivity. Empirically, the provision of feedback on teams’ relative performance, and the introduction of monetary prize tournaments both increase assortative matching into teams by ability, and make it less likely workers form teams with colleagues they are socially connected to. Relative to piece rates, the additional provision of feedback to teams significantly reduces average productivity by 14%, while adding a tournament prize structure significantly increases it by 24%. Both effects are heterogeneous: feedback only affects teams at the bottom of the conditional productivity distribution, and tournaments only affect teams at the top. The analysis highlights new directions for research in understanding how agents react to monetary and non-monetary incentives in workplaces characterized by team production where teams form endogenously.