The article focuses on the importance of effective management of virtual teams to increase their productivity. A virtual team is a group of individuals working at different places interconnected through web communication. This includes instant messaging, electronic mailing, and web conferencing. For effective management of the team, it is required to have a virtual team charter that clearly defines the mission, objectives, and roles of each member. A universal communication etiquette defining the use of technology should be established. Creating team profile and rewarding the team members on the basis of team performance could also help in increasing work efficiency of the team. Moreover, knowledge about different culture fosters in building a highly productive team.