Higher education managers are under increasing pressure from governments to reduce costs by adopting more flexible staffing practices and tensions can arise as institutions seek to sustain motivation and morale across a diversifying workforce. This paper considers how institutional management and governance practices facilitate innovative developments whilst also providing a supportive and inclusive environment. It draws on interviews in seven institutions to describe three models that reflect integrated, private-sector and partnership approaches, exploring the implications of these for the psychological contract between institutions and their staff, including different interpretations of the employment package; the establishment of processes that are seen as equitable and transparent, although not necessary identical; and the adoption of a range of communication channels, both at the level of the individual and collectively. (Contains 2 tables.)