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'Let's Be Friends': Bad Idea When That Person is Your Employee?

So, is it a good thing hang out outside work? The straight answer is probably no.
'Let's Be Friends': Bad Idea When That Person is Your Employee?
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One of the best perks of being a business owner is having complete control over whom you hire and whom you work with on a daily basis. You can select people who are genuinely talented and whom you get along with, to create the most ideal, productive, and comfortable environment for your own daily responsibilities.

Related: Managing People Is an Art: 32 Ways to Do it Right.

But there's a catch. As a boss and leader, you aren't going to be on the same hierarchical level as the people you hire. If you like them personally, and get along with them, you might be tempted to become friends with them -- but is this a good idea? Or are workplace friendships as an entrepreneur destined for failure?

The benefits of workplace friendships

There are some significant benefits that come with having genuine friendships in the workplace:

Employee retention. Studies consistently show that having friends in the workplace drives higher employee retention. One survey found that 30 percent of US workers surveyed said they felt they had a "best friend" in the workplace, and 75 percent planned to stay with the company for at least another year, with more than half feeling passionately close to the brand they worked for. If you strike up more friendships with your employees, you may be able to reap this benefit.

Stress relief. Close relationships with coworkers have a profound effect on stress levels. When you're around people you know and get along with, you feel more comfortable expressing your feelings, and you don't feel as much pressure or isolation when things go wrong.

Honesty. If your employees feel that they're your friends rather than your subordinates, they may be more likely to share criticisms and feedback with you. Otherwise, they may withhold any reservations or objections they have, in an effort to stay in their place.

Related: The 10 Golden Rules of Effective Management

The entrepreneurial complication

Of course, these benefits are perhaps best realized between coworkers at the same level. If you try to make friends with your employees, you'll likely experience the following dilemmas:

Favoritism. Even if you're friends with some of your employees, you probably won't be friends with all your employees. That's immediately going to make people suspicious that favoritism is occurring. Did you award that employee a raise because he was your friend or because he earned it? Did you reprimand a different coworker because she screwed up, or because she isn't that close to you personally?

Emotional crossover. Startups are high-stress environments, and that's going to lead to some emotional crossover. A rough day at the office could lead to a personal argument that permanently damages your friendship. A personal disagreement outside of office hours could compromise how you and your employee work together the next day. There are many opportunities for harm here that you'll have to avoid.

Hard decisions. Eventually, you'll have to make some hard decisions that could affect both your personal and professional relationship. What if you find out your friend has been stealing from the company? What if you need to fire some of your employees, and the one you feel closest to is the most logical target? How will you handle it if your friend asks you for a raise he or she doesn't genuinely deserve? The hard decisions here will only get harder when friendship is added as a complicating factor.

Insubordination. A close personal friend may not feel the need to obey your every order. This person may feel as if he or she has his/her own authority. An incident of this type could disrupt your organization's productivity and damage your perceived authority as a leader.

Sensitive personal information. Once you enter the world of entrepreneurship, you'll probably be much more careful about what you post on social media. After all, those posts could become public, and anything embarrassing or questionable you post could come back to haunt you. That vulnerability also lies with your intimate friendships. For example, if an employee witnesses you acting intoxicated, or knows about a deep personal struggle you have, he or she could use it against you in the future or see you in a different light entirely.

Proximity. You might feel the urge to surround yourself with your favorite people, but it's important to separate your social relationships from work. Being with employees eight hours a day at work, then spending extra recreational time with them on nights and weekends could make you grow resentful of one other rather quickly -- even if these relationships are healthy ones.

The bottom line

So, is it a good idea to be friends with your employees? The straight answer is probably no.

Related: 3 Strategies for Managing Employee Relationships As Your Company Grows

There are some benefits to showing personal support and building true emotional bonds with your employees, but if you want to retain your authority as a leader and proactively mitigate certain complications, it's better to separate your friendships from your work environment.