Whenever you get two people together, there's the chance of a disagreement. When a disagreement is resolved sensibly, there's no problem. When it isn't, and a disagreement (or maybe even personality clash) continues between employees, common sense tells you that production is going to drop and your business is going to pay for the discord.
What can you do to encourage your employees to set their personal stuff aside and stay focused on getting the job done?
Suppose you have two carpenters, or a leadman and a carpenter that are not getting along. You hear bits and pieces of it rattling around the company, but it hasn't really come to a head yet, you just know there are problems.
Call both parties into a meeting. Sit them down and start the meeting with, "Joe, Bob, I'm aware that the two of you seem to have a problem getting along. It's disrupting the workflow of this company, and that means it's costing me money. It's going to stop as of right now. I'm going to leave you in this room and ask the two of you to resolve any and all issues you might have. You don't have to agree with each other – maybe you need to agree to disagree. But I need you to be able to get along, without causing discord, if you both want to stay employed. Stay in here until you can get your differences resolved. If you can't, or if down the road I continue to see problems between you, your future with this company will be coming to an end." Then you get up and leave.
Every time I've seen this method used, it has worked. Many employees don't realize the impact their disagreement is having on the company. When it's pointed out to them, the need to take care of their families almost always will override their egos and things will get resolved.