The ubiquity of technology hasn't just blurred the lines between personal time and work time. It has also blurred the lines between work relationships and personal relationships. This can actually be a good thing when it comes to peer relationships, but any time reporting relationships come into play, things get tricky.
As a manager, it's important that you maintain a certain amount of distance from your direct reports. This is not because you're better than them or anything like that. It's that you now have a great deal of influence over their livelihood and short-term career prospects, and that creates a power imbalance between you that prevents you from interacting like equals. The following guidelines can help you to avoid some of the more common social media issues that come up in the workplace.
If you want to take the safest approach, avoid it altogether.
If there isn't a compelling reason, such as social media being part of the work itself or the organizational culture being extremely close-knit, consider not connecting with anyone in your reporting chain (up or down) on social media at all. This will help you avoid seeing things that are not work-related but might affect your view of them negatively, including things posted by people in their personal networks. It will also mean that you don't have to keep up to date with the latest privacy settings to ensure that you don't inadvertently share something that might affect their view of you.
If you do connect, include all of your direct reports.
If you do decide to connect with your employees on social media, it's important that you connect with all of them. If you're friends outside of work with one of your employees, there is already going to be a perception that you might play favorites. Don't add fuel to that fire by giving them privileged access to you on social media, too. As a manager, you have to be more objective and treat your employees equally, even if you have a prior friendship with one of them. (A case can be made that this guideline should apply to social events as well, but that's a subject for another post.)
Develop a guiding principle for how you will respond, in advance of any incidents.
Consider what you will do if something comes up, such as an employee who calls in sick the morning after posting party pictures on Facebook, or an employee who complains about you on Twitter. Keep in mind that your employees probably feel that their social media accounts are personal and that they have complete freedom of speech there. Make sure you know what your organization's policies are regarding the extent to which you can hold employees accountable for things they post on social media, and within those guidelines, come up with a personal policy regarding what you will and won't do in response to what you see on social media. (Hopefully it's beginning to become apparent that not connecting is really your best bet - you can avoid all of these issues.)
Be mindful of what you post.
If employees might see what you've posted, either because they're connected with you or because the post is public, think about how what you're posting might affect their perception of you and your credibility. Even though social media is casual and informal, you are still their boss.
Unless your organization has clear-cut policies, it's generally up to you to decide where to draw the line. You have to use your best judgment based on your specific situation and your relationship with your employees. As long as you are consistent, that's what's most important.