The relationship between a boss and his employees is a sensitive one. The goal of the boss is to see the business going on the right path, while the employees want to earn their daily living. Many people believe that a friendly relationship is not the proper one and should not be a part of the working environment.
On the other hand, others think that a good connection between the two is beneficial, especially to the ones who need social contact.
Being a pal for your employees means to get involved at a totally different level. You care about their needs in a different manner and they can talk to you more freely about their issues. This can be a good thing because they will love more their workplace.
The negative thing about being too close to the employees is that your authority might suffer to some extent. As they become familiar with you, it will be easy to question your decisions. You might feel frustrated to explain everything and this new level relationship might go too far.
So the best thing is to keep a balance between these two approaches. You need to be sensitive to their needs, but also exercise your authority at work.
Be friendly, NOT A FRIEND!