When we work closely with our employees no matter how large or small the business over time we form friendships and create a "family atmosphere" in the workplace. Developing close-knit relationships enriches our time at work, but that same closeness may make it difficult to confront tough, work-related issues squarely. However, by following sound management practices, we can ease the challenge of supervising employees who have become our friends.

Bookstore owners Penny and Michael were perplexed. "What are we doing wrong?" they asked. "How can we hire so many seemingly nice people who just don't perform to the level of our expectations?"

Recruiting and hiring good employees is an ongoing challenge for every business, whether large or small. Keeping your best employees can be even more difficult in today's competitive marketplace. Although some turnover is inevitable, you can create a business environment that will build employee loyalty and make your best employees want to stay, by following these five basic rules: