Developing close bonds with your employees is all but inevitable. Indeed, being friendly with your team members can make the job more rewarding and enjoyable for everyone. But there’s a huge difference between being friendly with your employees and developing a genuine friendship.

When you do things like spend lots of time together outside of work, introduce them to your family, and share intimate details about your life with one another, you open up the potential for some major complications. Given the power imbalance and potential conflicts of interest, having a true friendship with an employee can test your personal/professional boundaries like practically nothing else.

Last week, we offered our first three strategies to help you successfully navigate employer-employee friendships, and here we round things out with the remaining four:

You should be very direct with the employee that because you’re responsible for the overall well-being of everyone on the team and all clients and customers, your role as a business owner must come first. He or she should understand that you can’t demonstrate even the slightest bit of favoritism or preferential treatment towards him or her. The mere rumor of such bias can be disastrous for team morale and respect for your leadership.

This means that even if you have critical inside knowledge, such as knowing the company is about to be sold and everyone laid off, your lips must remain sealed. You need to be totally transparent with your employee-friend, letting them know upfront that the company’s objectives must always remain your top priority.

When it comes to being friends with an employee, how you navigate conflict is where the rubber really meets the road. It’s your job to keep your operation firing on all cylinders, which requires you to offer regular feedback to your team—and sometimes even take disciplinary actions.

Offering constructive criticism and leading your team is challenging enough, but add a friendship to the equation, and the potential for bruised egos and resentment skyrockets. And this is true for both sides. An employee who’s your friend could have his or her feelings more hurt by a critical remark about lagging performance. And if you ever need to take disciplinary action, he or she might even feel betrayed.

By the same token, if you’re friends with a team member, it can be easy for you to see the friend’s misbehavior or poor performance as a personal slight against yourself. Indeed, being friends with staff can cause you to second-guess what would normally be simple decisions and/or needlessly overanalyze your feedback to prevent offending your buddy.

This can all be mitigated with strong communication skills, willingness to hear and be with impact, and learning how to not get defensive. If you’re in the senior position, you’ll need to lead here.

When you’re true friends with someone, you can inject much more emotion into a relationship. This can be great if it inspires the two of you to up-level your performance and work more effectively. But it can also lead to needless tension and confusion when you have a conflict.

You have to be extraordinarily mindful of your thoughts and feelings when dealing with the other person. If you’re experiencing anger, hurt, or resentment, you’ll need to become aware of that before acting. Then, you should step back from the situation to evaluate whether or not the friendship is in any way causing or exaggerating your emotional state. 

If you’re being overly emotional, you might want to cool off for a while and reconsider the situation later. 

The kind of mindful behavior we’re talking about here can require a Buddha-like level of self-awareness, and it may be difficult to maintain an even keel in all situations. If you’re having issues making truly objective decisions, you may want to turn to an outside source—a friend, spiritual mentor, life coach, or us—who can take an unbiased look at the situation and give you honest advice.

In the end, it all comes down to whether or not the friendship is negatively impacting work performance, injecting needless tension into the workplace, or impairing your ability to make decisions. If you notice any of these things happening, you should seriously reconsider whether employing your friend is worth risking your business over.

In addition to the potential emotional and performance pitfalls involved with employer-employee friendships, such relationships can also have potential legal ramifications. Consult with us to discuss the possible legal issues involved and how you can prevent them.

When it comes to befriending team members, we can provide you with objective advice about what is—and isn’t—in the best interest of your business’ success. 

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.