From the December 2012 issue of Entrepreneur

The first thing to remember about any office party--holiday or otherwise--is that the office party is a party, but it is not a party. It's more like a really fun conference. You are at work (even if the party is being held off-site--think of the venue as an embassy), and you are working. You're having a good time--or at least you're trying to--but you're still working. It doesn't matter if you work for a startup or a global corporation: The work party is like a team-building exercise.

What distinguishes the holiday party from other work parties is that it is celebrating an ending. The holiday party is about collective relief: that it's the end of the year and the company still exists; that everyone--at least everyone at the party--still has jobs; etc. And when people feel relieved, people want to drink. And when people drink, interesting things can happen. Which is awful, because the last thing you want is to be involved in an interesting thing at the holiday party.

Alcohol makes people forget this. Mindy from accounting has a couple of glasses of brandy punch and all of a sudden she's rambling on about her daughter's boyfriend's lack of ambition and recounting the story of her lost year in the '70s and giving the CEO a kiss on the cheek and winking while telling him she always felt they were "like, simpatico," and an hour later she's wearing reindeer antlers around her chin and she's being whisked out of the room by the woman she always goes outside to smoke with. (The name has been changed, but that's a true story.) That kind of behavior is what makes regular parties fun. But we're not talking about a regular party.

The Goal
What you have to do before the party is make a promise--to yourself, to the co-worker you're close friends with, to the nice woman who fills the snack machine, to the god of the religion associated with whatever holiday you think this party is obliquely honoring. And that promise is: I will come out of this party with more respect, dignity and discretion than I had when I went in.

The goal is to enhance your good reputation and possibly dispel myths about yourself (for instance, that you are aloof). The goal is to have fun in a way that doesn't get whispered about on Monday morning.

The Rules
The first rule of holiday partygoing: Do not think of the open bar as a buffet of alcohol. Rather, think of it as a soup kitchen of alcohol. You get your ration; you go back to the party.

"You're at a work event; it's not you hanging out with a bunch of your friends, so respect yourself," says Brian Worley, co-owner of Santa Monica, Calif.-based event production company YourBash. "It may be free alcohol and free beverages and free food, but decorum is still important. People are watching."

He's right. People are watching. They're watching you even more at a party than they are when you're working with them, because you're more interesting at the holiday party. You're more relaxed. Also, you're not behind a desk, so you're technically more visible. You're right there in the open. The boss is looking. The intern is looking. Mindy's looking, too.

"I think people should know when they've had too much alcohol. People say, 'Don't drink too much,' but that's like saying, 'Here are some shades of gray; pick the one you're most comfortable with,'" says Ben Huh, CEO of Cheezburger, the company behind websites like I Can Has Cheezburger? and Fail Blog. "People need to recognize when they're drunk or when they're approaching that point. Everyone behaves differently. For me, I get sleepy. Some people get really 'huggy'--they like to hug everybody and tell them how much they love them. When you find yourself saying, 'Hey, I feel like I should go up to that guy I've known for like 20 minutes and tell him I love him'--red flag."

What he's talking about is discretion. And discretion is the most underrated virtue of the workplace, generally, and nowhere is it more important than at the holiday party. Mainly because you're vulnerable: You're tired, you've worked hard all year, you think you deserve this. And you do. Which is why you should be very careful not to turn this into something you do not deserve: scorn, ridicule, whispers in the kitchen on Monday morning.

Another helpful rule: Do what the boss does. "Take a lead from your boss, but never go overboard," says Michael Jones, angel investor and CEO of Santa Monica, Calif.-based startup incubator Science. "If your senior management is having a good time, by all means participate, but you don't want to be the one at the end of the night that stuck out."

On a practical note, you want to talk to the boss as early as possible. The first thing you should do is thank the boss. Clink glasses with the boss. Tell the boss it's been a helluva year. Then move on. This represents a larger (and underrated) principle of work-partygoing. Achieve your goals early. Eat early. Drink early (not too much). Schmooze early. Maybe leave a little early, too.

And never talk about work at the party. Because when you talk about work at the party, you will start trash-talking work at the party. Despite any resentment that has built up over time, despite the grudges you may be harboring, don't act upon any associated impulses. Of course, this is especially true when clients are present.

"I've seen this mistake made many times in my career," Huh says. "It's like, 'Hey dude, that guy's right there.' Avoid talking about work or pitching. If you're an entrepreneur and at a party with lots of investors, imagine how often that investor gets pitched. People are coming up to them at every social event saying, 'I've got this idea, I've got this thing.' Imagine how tiring that is."

Here's how to lock it down at the holiday party: Situate your mood somewhere between merry and jolly--a couple notches short of festive. The main thing is:

Be generous with everything (except the punch). It's the perfect time of year for that anyway.

Key Technical Matters

If you want to have a good time, be the guy in the Santa costume.  
 
Otherwise …
 
The Santa hat. Yes.
 
The antler headpiece. Yes.
 
The holiday noisemaker. By all means.  
 
The mistletoe. No.
It should not be hung from a doorway. It should not be hung from atop your Santa hat. It should not be hung from a fishing pole fashioned into a kind of lure.
 
A couple of hours into the party, begin canceling the meetings you have scheduled for the next morning.

If you must, talk about work no more than 10 percent of the time.
 
Talk about whether the holiday party should be called a "holiday party" no more than 0 percent of the time.

If you're asking your reflection in the restroom mirror how drunk you should get, you should probably slow down a little.

If you're asking your reflection in the restroom mirror how drunk you already are, immediately stop drinking.

If you're asking your reflection in the restroom mirror how "bless-ud" is this glorious night, go lie down in the supply closet.

If your boss is standing behind you, put on your Santa hat, gather your noisemaker, your drink and your dignity and walk away.

Dancing is allowed but not encouraged.

Unless you're wearing the Santa costume. Santa can do whatever he wants.