To shut down the rumor mill, you must do more than demand that your staff stop gossiping. You also have to give them something more fruitful to talk about.
After someone introduces a rumor, it can take on a life all its own. If the facts clearly indicate its falsity, the rumor can mutate and remain a persistent distraction.
Research shows that when people repeat a rumor even in an attempt to prove that it's wrong, it gains credence. That's because if we hear something that sounds vaguely familiar, we assume we've heard it before and it must be true.
We may forget that the reason it sounds familiar is someone proved that the rumor was wrong. A part of us may want to believe it's true or perhaps we simply cannot recall the context of the original conversation. In any case, repeating a rumor keeps it alive.
To terminate the chain reaction that fuels rumors, change the subject. Raise constructive topics and generate a lively discussion. In time, you will supplant rumors with productive matters that demand attention.
If employees come to you to ask whether a rumor is true, cite relevant facts succinctly. But don't stop there. Switch topics to a more pressing work-related issue. That way, the individual will leave your office more concerned with the new topic than the old one.
Say an aide asks if it's true Joe is on leave because he's in a drug rehab facility. You give a one-sentence reply ("What's important is Joe will be back next week") and then ask about your aide's meeting with a key customer. You wind up in a long discussion on how to manage that customer.Hours later, the aide is more preoccupied with next steps to handle the customer than the reason for Joe's absence.