First, The Bad News . . .

You've got a problem. It might be that you've just lost a big client, or there's a major production breakdown, or a key staffer is leaving-whatever it is, it's big, and you need to break the news to your employees. How can you do it without demoralizing them and further hurting the company? Most important, don't put it off, says T.O. Collier, president of Nimblewill Creek Consulting Inc., a human resources practices consulting firm in Dahlonega, Georgia. There's nothing to be gained and much to be lost by waiting. "Rumors get out," Collier says. "If you don't tell your people, they're going to find out anyway or they're going to make up half-truths."

If your company is small enough, make your announcement in person; if that's not practical, have managers gather employees together and share the information. People need the opportunity to react and ask questions, and they can't do that when they just receive a memo.