There needs to be some distance between you and your employees. After all, you still need to have some sort of perception of hierarchy. Some understanding of authority ensures that everyone can get along just well without crossing the line.
The best way to stay within guidelines is by establishing ground rules. For example, you can spend time outside of work during happy hour, volunteering, or when attending industry events. But, you may have a policy that you do not attend the birthday party of your employee's children or that you never drink alcohol with them.
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Understanding the importance of constructive criticism
How to receive constructive criticism positively
How to use constructive criticism to improve performance
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