I have somebody in my own team who keeps spreading rumors about the other colleagues. She targets the employees with good track records and good reputations. Say someone is very good at their work and gets an appreciation from our boss, then this lady will start spreading rumors about them. How do we deal with people like this? Where's the line?
This is the sort of thing you see in mafia movies and high school teen dramas, where the bad guys and catty girls try undermining someone's power by bad-mouthing them. The good news, at least in Hollywood, is that the rats always get theirs in the end.
Unfortunately, your office is not a Hollywood movie. And this sort of office poison tends to go unchecked with no tidy resolution.
Every office has this woman (or man). Most have several. Their prevalence is sad; fortunately, everyone is so used to this behavior that they know how to spot it and, hopefully, disregard it.
The temptation is to give this woman a taste of her own medicine. There is some schadenfreude to be had in reversing the gossip channels against her. But this is where I'm supposed to tell you not to stoop to her level and simply report her to your boss and advise you to compile a list of her indiscretions and report them to human resources. That's the right thing to do.
Here's the fun thing to do, but don't do this: use her own sad insecurities to teach her a lesson that will, hopefully, put the brakes on her mouth garbage. To do this, you need a plan and some conspirators (so maybe this is a high school movie after all). Create a harmlessly juicy, and completely false, piece of gossip about one of your conspirators. Then you approach the evil gossip and tell her, but make her swear never to tell anyone. Of course, she will. Let her do her thing and...
When the news finally spreads back to your conspirator, both of you confront her. You tell her about the experiment, but say you created it because you wanted to defend her against the office perception that she is an out-of-control rumor monger. Let her know that she failed you, she disappointed you, and, as the movie comes to an end, you should hear her summing up her epiphany in a neat little voice-over.
But don't do any of this. Tell human resources. Have her officially reprimanded. Life isn't a movie. Really.
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