This paper reviews some of the literature on the use of groupwork as a form of assessment in tertiary institutions. It outlines the considerable advantages of groupwork but also its systemic associated problems. In discussing the problems, the paper considers issues such as "free riding" and the "sucker effect", issues associated with ethnic mix in groups, and the social dilemma problem--in which students face conflicting demands between altruism and self-interest. The paper then outlines several models of effective groupwork and makes suggestions for implementing groupwork tasks. The paper also looks at the key assessment tasks which are commonly employed--namely, additive, conjunctive, disjunctive and discretionary tasks--and assesses which are most suited to groupwork. The paper considers the related issues of task complexity, recognition for effort, and strategies for minimising issues concerning group size. The paper also briefly considers strategies for implementing incentives for groupwork members, and outlines the issue of penalties for unproductive group members. The paper concludes by providing recommendations for how to maximise the advantages of groupwork while trying to minimise the disadvantages.