A subordinate has raised a personal issue with you by email which is causing him/her obvious distress -

Option 1 - Face to Face: If meeting the person is possible then obviously face-to-face, if not then:

Option 2 - Email: Email allows you to take your time, put your thoughts together first and properly articulate your reply. 

Option 3 - Phone: You can combine this option after email or do it independently but be prepared as what to say and approach for unexpected conversation or turn of events.

In all 3 cases, being reasonable, accomodating and compassionate to others is most important. If someone has raised and issue and it is reasonable then you owe to get it right for them.

In such situations only a Face2Face can handle it

face-to-face,

phone,

text,

email,

letter.

In this order, whatever is feasible promptly.