Some companieshave policies prohibiting all romantic relationships between employees. But you should accept the inevitable--office romances do occur, although they are fraught with the danger of charges of favoritism, sexual harassment, sexual discrimination, etc. While policies prohibiting supervisor-employee relationships make sense, as do those between employees with linked financial responsibilities, you will probably have to accept general workplace dating unless you want invade employees' privacy or have a policy that is generally unenforceable.
If you do decide to have a policy against workplace dating:
Make sure it is well publicized and train supervisors about it.
Announce that the policy is to protect employees from intimidation, harassment, and favoritism, not to invade their privacy or discourage social interaction among employees.
Put the policy in your handbook so you will have a receipt that each employee has received and read the policy.
If a supervisor/subordinate relationship does develop, you must take steps to protect the subordinate, including making certain the relationship is consensual. You may have to consider transferring one of the parties. Most companies let the couple decide who will transfer based upon openings in the company. If a choice is not made, the company will decide. However, never base the transfer decision on gender!
We have a policy that's pretty basic, but it does address the subject:
Dating or becoming romantically involved with a co-worker or supervisor is discouraged. If such a relationship develops between a supervisor and an employee, the supervisor must promptly report the relationship to the director of human resources. Romantic or sexual relationships between employees can cause problems in the workplace, including problems with job performance, claims of favoritism, and accusations of harassment; therefore, in such situations, the company reserves the right to transfer or discharge employees, or to take other action it deems appropriate.
We also cover the policy when we do harassment training with employees and managers.
Just read an article this weekend about a nonfraternization policy that was struct down because not only did it ban workplace romances, it was so broad that it banned employees from having outside relationships of any kind with coworkers and protected activities, so the union brought suit under the NLRA (Guardsman LLC v. NLRB).
Guess if you want to ban workplace romances, you have to be more specific in the policy and/or specifically state that the policy excludes employee rights protected under the NLRA.
Some of these companies go way overboard with these policies--and for what? As has been discussed in this thread, supervisor-subordinate relationships have obvious dangers. Our policy requires disclosure of these relationships, and then we will work to separate them so that the subordinate no longer reports to the supervisor. (Only in the rarest of circumstances would we probably let signed statements that the relationship is consensual suffice, but it is a conceivable scenario.)
But prohibiting co-workers from dating--or fraternizing while outside the office? That seems like overkill. I don't think you're any more likely to run into more trouble because you allow co-workers to date or socialize. Most harassment cases I hear and read about aren't about relationships that go sour (although I'm sure there are some). The vast majority regard unwelcome advances from a co-worker where the victim/harassed employee had no interest in the perpetrator of the harassment. If an employee is harassing another employee, we should react and respond appropriately--but we shouldn't be trying to police employees' relationships with each other otherwise.
Remember, we're dealing with a world where for many employees, work is where they spend more of their time than anywhere else. It's natural for relationships (romantic or just friendships) to form when you're spending so much time with the same people. Taking that away is only going to make employees resentful. Just cover your bases with a well-communicated harassment policy on what types of workplace behavior is prohibited, then treat your employees like adults and let them make their own choices regarding their personal lives--that's my view.
I just read some good advice regarding manager/subordinate relationships.
If you have a policy that managers can't date subordinates, and the manager says "You can't do anything about it; it's my right to associate with who I want to." You can say, "True, but it's not your right to be a manager. So if you want to follow the policy, I will make you an employee and then you can date this person."
The article also said if you are made aware that two employees are dating, you should asks the subordinate, usually a woman, if everything about the relationship is OK with her. Then--ask again every month.
Document all these discussions so you will be able to show that you were taking action to protect the employee.