The impact of workplace relationships on individual performance in the construction industry has been understudied. Nevertheless, improving individual performance is essential for project performance and gaining competitive advantage. This case study aims to study how the department climate in terms of existing relationships influence individual performance as rated by managers. Specifically, the paper presents the idea of functional and dysfunctional relationships in project-based organizations and its importance to individual performance. The case study uses data from a survey distributed to employees in one department within a global construction and engineering organization. First, different types of relationships were identified using the survey data available on frequency of knowledge sharing interactions and functional and dysfunctional relationships among the employees. Second, a social network analysis approach was used to identify centrality scores and shortest paths for both functional and dysfunctional networks. Finally, a linear regression analysis was performed to study the impact of functional and dysfunctional relationships on the individual performance. The results demonstrate that functional relationships have significant positive impact on individual performance while the dysfunctional relationships does not have any significant impact. These results have practical implications for practitioners in construction and engineering companies as they improve understanding regarding the factors affecting individual performance. Furthermore, the results contribute to theory of work climate by indicating that work climate could affect the individual performance which eventually could be a factor affecting the organizational performance
