LUCKILY for most of us, we don’t have to announce anything as difficult as cuts in the welfare budget, unlike George Osborne, who outlined his comprehensive spending review yesterday. Yet at some point in their careers all managers have to deliver bad news. So when you do, what’s the best way?

For starters, explain, explain, explain. Decades of research in psychology and behavioural economics point to the importance of providing explanations for your actions. Whether you’re making an unfair offer, playing uncooperatively in a Prisoner’s Dilemma game, or announcing a layoff, explaining why you're doing what you’re doing and showing that you mean well typically softens the blow. In the absence of explanations, people have a tendency to assume the worst of intentions for your behaviour. And though it seems to the more rational-minded among us that the only pertinent information is the objective outcome – such as pounds lost or saved – to most people what is in your heart and mind matters quite a bit.

Second, focus on the most pertinent comparisons. Human nature means that bad news makes for good copy, and dire rumors spread faster than good tidings. It’s not surprising, then, that listeners tend to focus on the most dramatic aspects of a situation rather than the most level-headed.

Thirdly, make sure that you are framing your news in the best way for you. Give statistics, background and information to back up why you are doing what you are. There are many ways to spin a situation, so make sure that your justifications are clear and well backed-up with facts and figures. Then you are more likely to bring people with you.

Finally, be decisive. Though some people thrill to uncertain prospects, most loathe uncertainty. Part of the danger in delivering bad news is that it will be seen as a sign of more trouble to come. So if the news you’re delivering is the worst of it, say so.

Kay-Yut Chen and Marina Krakovsky are the authors of Secrets of the Moneylab: How Understanding People Will Increase Your Profits (Portfolio Penguin)