Managing the Psychological Contract for Employers of Choice: Would you like fries with that?

In Australia, as elsewhere in the Western world, organisations are endeavouring to position themselves as ‘Employers of Choice’ (EOC). In marketing parlance, becoming an EOC involves construction of a unique ‘brand identity’ and ‘value proposition’ that sets an organisation apart from its competitors in a tight labour market. In other words, understanding how the psychological contract can be constructed as an attractive ‘value proposition’ is a prerequisite for successful employer branding. Recently, in the light of perceived theoretical limitations and practical implementation issues associated with the psychological contract, there has been a call for an expansion of the perspectives used to inform its conceptualisation and management. In response, this paper explores the application of marketing concepts and theories to the psychological contract, highlighting the differing manner in which employees and the organisation perceive value in relation to the benefits and the costs associated with the employment relationship. It suggests that using everyday marketing language and concepts surrounding notions such as ‘value’ and ‘price’ offers the potential for broadening managers’ understanding of the psychological contract and its role in creating and sustaining a viable EOC position.