Psst... gossip can start a walk-out

''Meet me at the photocopier - I've got something to tell you", is a message whispered in most workplaces. Gossip, rumour and speculation are rife, whether it's the latest update on the love life of a colleague, or who is being paid what. Pretty harmless, you might think - nothing more than a chance to luxuriate in the knowledge that an office affair is not as discreet as the participants believe it to be, or to detail the latest display of ineptitude by one's boss - but according to management experts, idle gossip can lower morale, cause insecurity and sow the seeds of mistrust.

Office gossip, says Ed Young, who is senior fellow in organisational behaviour at Manchester Business School, "marks out group boundaries and, oddly, can be quite democratic because it is something that most people can participate in".

It also has a social function, and is one of the things that are missed most by those who have forsaken the office to work at home. Dave Pearson, a graphic designer, says: "I really do miss that intrigue, the 'you will never guess what' factor that goes with gossiping in the office. I don't think I'm alone in that. I now gossip on the phone or via e-mail with other freelances, but it's not quite the same."

But gossip has a down-side. A spokesman for Video Arts, the management training company, which has produced a course on how to manage office gossip, called The Grapevine, says: "Harmless tittle-tattle goes on at all workplaces, but there are times when gossip can have damaging consequences. The rumour mill can cause anxiety and that can have a devastating effect on a work-force; commitment falls off and key staff begin to look for new jobs. The best defence against the potentially damaging consequences of ill-informed gossip is effective communication."

American Express in the US has its own communications programme, intended to stop unfounded rumours in their tracks. It has established a free telephone number which employees can call anonymously to ask questions about company policy. These are answered once a week via a voice mail message sent to everyone in the organisation.

Dave House, senior vice-president of sales and marketing, says: "There was a rumour doing the rounds that we were going to take away people's company cars, and they were pretty upset about it; but it wasn't true, and using the system we were able to reassure them about the situation."

House says that when the system was introduced he was getting six or seven questions a week and some were "pretty silly", but the number has now fallen to around two a week, and the quality of the questions has improved dramatically. "I think we are communicating much better with employees. They feel they are being heard and are getting answers in a non-confrontational way."

While American Express is attempting to put a stop to gossip and rumour, Ed Young says that changes in organisations can sometimes start with gossip. "There is a body of literature to suggest that innovation comes from the mucky innards of business," he says.

His view is supported by the IT Skills Forum, an organisation that aims to improve business performance through technology. It is co-ordinating research with City University Business School into the use of gossip as a business tool, and is working with a number of companies including IBM, Sun Microsystems, Barclays Bank and ICI.

Meenu Vora, the managing director, says: "Sometimes what is classed as gossip is really soft business intelligence, and if you gather facts and rumour together, then you can create a knowledge base."

To develop this knowledge base large corporations should take advantage of shared computer systems and software such as Lotus Notes, says the Forum.

Ms Vora adds: "The key to communicating internally and externally is a database where any information relating to a particular topic can be stored, even if it is along the lines of 'I met so-and-so in the pub last night and he told me this'. Added together, it can be valuable information, and it's an example of the role that technology can play in an organisation."

Gossiping at the photocopier may never be the same again