A model of the impact of envy in groups is proposed and tested in a longitudinal study of 143 groups. Envy was directly and negatively relatedto group performance. Moreover, envy indirectly influenced group performance, absenteeism, and group satisfaction by increasing social loafing and reducing both group potency and cohesion. This study provides an initial step in identifying the processes through which envy impacts group effectiveness. Implications are discussed and future research directions are identified.