How do you manage your sub-ordinates when they think their work-place is like their residence?

Your question reminded me with Google and its policy alloowing emplpyees to design, furnish,, decorate their office (work space) as they like so that they feel at home.  

Employees can take showers, play gym, eat and drink freely during work hours !! 

Could this revolutionary work style be better than classical one ??OK ... let me throw couple ideas here 

1. Management by mandate ... making clear mandatory things that need to be observed at all times, which means by default that other things not mentioned in the mandatory list are "volutary" or "optional"   
2. Management by Objective ... making clear what the objective/result is ... within what acceptance criteria regarding quality, quantity and time duration

The right way to manage the subordinates would vary from case to case, including the type of work being done, its criticality, tolerance to errors or delays, the type and character of your subordinates, their personality, attitude, personality, experience, maturity, discipline and attitude !!