Cynthia Passmore, CEO of Enesco Group Inc. surprised a group of employees last week with the revelation that she’s having a personal relationship with a consultant she hired to help turn around the struggling knick-knack company.

Ms. Passmore delivered the news at a hastily called meeting with middle managers on Thursday, according to an employee who was there. After revealing that she is going through a divorce and apologizing for being distracted at work, Ms. Passmore disclosed that she has become involved with someone who “makes her happy,” according to the employee who was there.