Rumor Has It. Is the rumor mill out of control in your company? Keeping the communication lines open ought to take care of the problem.

Rumor has it that managers at Shaw's Supermarkets started anemployee newsletter called The Rumor Buster. "If youcan't lick em, join 'em" seems to be the philosophybehind this clever communications strategy.

Rumors fly whenever employees are worried or a change isunderway. And rumors usually exaggerate the problem and spreadmisinformation. The occasion for Shaw's to start theirnewsletter was (as rumor has it) the acquisition of anothersupermarket chain. Whenever such transitions are underway,employees do a lot of talking because they are naturally quiteconcerned about possible changes that could affect their work oreven their jobs.

And much of what people say is nothing more than the stuff ofrumors. "Did you hear they are going to close half thestores?" "Well, I heard that salaries are going to becut." And so forth.

The actual truth is almost always far more favorable than therumors, so it helps morale and gets everyone refocused on doing agood job to share accurate information and squash alarmist rumors.An in-house newsletter (or electronic newsletter if you want to bemodern about it) is a very good way to set the record straight.

How big an organization do you have to be to need a Rumor Busternewsletter of your own? A lot smaller than most managers realize. Idon't think there is a single business with more than oneperson in it that does not suffer from rumoritis. I just talkedwith the head of a business with a dozen employees about aninteresting rumor started by one of them. It concernedmisappropriation of funds by the owner of the business. The rumorhas it that he is taking large cash payments that are not beingproperly reported on the company's books.

Now that's the sort of rumor that can be very bad forbusiness. He was quite upset to hear that, while he was out on theroad working hard to bring in more business, the employees werebusy talking about how they thought he wasn't working enoughand was getting overpaid.

Where had this rumor come from? Well, a new employee who washelping with bookkeeping had started it. She didn't know muchabout the business but had lots of suspicions, most of them carriedover from a previous job where perhaps things were not always asthey seemed. Because other employees knew she was involved indisbursements, they blindly believed her stories.

What happens to productivity when a nasty rumor like thatcirculates? What is the impact on communications? On trust? Rumorsmay seem like minor irritants, but in fact they can have asignificant negative impact on the business--even (or perhapsespecially) in smaller businesses, which can't afford to havedistracted or disgruntled employees.

What to do about nasty rumors? The best immediate response isthe one the supermarket chain took--to share detailed and accurateinformation right away. May as well open those books enough to showthe employees you aren't salting away money in some Enron-styleaccounts. Whatever you are taking in compensation, it is probablyat or below the average for heads of businesses such as yours--andthey can't really start much of a rumor about your getting paidcompetitively for your work. That, at any rate, was the advice Igave the poor executive whose new employee was sandbagging him withnasty rumors about improper payouts.

The other action to take is longer-term but more lasting in itsimpact--to invest a little more time and effort into buildinghealthy ongoing communications with all employees. This is always atough challenge for busy managers, but at the very least a monthlyQ&A with employees is essential. Advertise it as a time forthem to ask you about anything that is on their mind, and promiseto be as open as you reasonably can. Then instead of whisperingtheir suspicions to each other, your employees can voice them outloud to you--and give you the opportunity to set the recordstraight.

And rumor has it the record needs some straightening, even inyour business. Why, just the other day somebody told me thatyou'd...

Alex Hiam is a trainer, consultant and author of severalpopular books on business management, marketing andentrepreneurship, including Streetwise Motivating & RewardingEmployees, The Vest-Pocket CEOand other popularbooks.