COUNTING CARROTS… A QUANTITATIVE CROSS-SECTION STUDY ON THE DISTRI- BUTION OF MOTIVATION INCENTIVES IN CENTRAL STOCK- HOLM’S BANKS ACCORDING TO BANK-EMPLOYEES Frank B. Francisson , SH17HP1845 SUPERVISOR: Thomas Marmefelt SÖDERTÖRN UNIVERSITY | Institution of Social Science ECONOMICS | BSc Thesis 15 Credits SPRING TERM 2020 | EXAMINER: Mats Nilsson THE ABSTRACT Counting Carrots… as this cross-section study is entitled studied the distribution of motivation incentives in Central Stockholm’s banking sector and if it varied for different groups of bank- employees, according to bank-employees. This variation in the distribution of employee benefits was examined quantitatively in accordance to three explanatory variables: 1 – Job position, 2 – Bank size and 3 – the Gender of respondents. On account of the above variables, three hypotheses were propounded from: the concept of separating firm ownership and control, economies of scale and experience and the theory on labor market dualism. Concerning Bank size, empirical proof showed that the distribution of employee incentives in Big banks varied more than it did in Small banks thanks to cost and resource saving advantages. Nevertheless, this study was unsuccessful in producing adequate empirical evidence to indicate such variation in motivation incentives when considering employees’ Job position and Gender. This lack of empirical proof contradicted notions from relevant theoretical constructs on divorcing firm ownership from control and from the dual labor market theory. In some respects, conclusions arrived at were not consistent with what Davydenko et al. (2017) observed in Poznan, Poland on a similar topic about incentives diversity. In future, more work remains to be done which should include more features of motivation incentives such as their quality versus quantity or/and their degree of effectiveness in elevating employee engagement with the intent to improve or complement the produced findings from this study. SAMMANFATTNING: Denna tvärsnittsstudie har undersökt variabilitet på de verktyg som banker i Stockholm använder för att höja motivationen bland sina anställda. Studiens metod har varit kvantitativ, där respondenterna utgjorts av bankanställda i Stockholm. Studiens insamlade data har sedan granskats mot tre förklarande variabler: 1 – anställningsposition, 2 – storleken på den bank som respondenten är anställd på, och slutligen 3 – respondentens kön. Beträffande anställningsposition och kön lyckades studien inte finna några övertygande empiriska bevis på att dessa variabler hade någon tydlig effekt på hur motivationsincitamenten mottogs. Däremot förefaller storleken på banken vara av betydelse, där större banker erbjuder större incitamentvariabilitet för sina anställda, än små banker. I vissa fall har de slutsatser som dragits varken varit förenliga med den relevanta teorin eller i överensstämmelse med vad Davydenko et al. (2017) observerade när de studerade ett liknande ämne i staden Poznan. I framtiden återstår emellertid mer arbete, vilket bör utgå från en större mängd egenskaper av incitamentsverktyg. Till yttermera visso bör motivationsincitamentens kvalitet kontra kvantitet studeras med frågor såsom huruvida specifika personalförmåner verkligen uppfyller sitt tänkta syfte eller ej. Detta för att komplettera och/eller nyansera de upptäckter som gjorts i Att räkna morötter... KEYWORDS: Motivation incentives, Incentives variability, Bank-employees, Employee benefits, Human resource management (HRM), Financial corporations or firms. 1 TABLE OF CONTENTS I: INTRODUCTION ............................................................................................................................. 4 1.1. The Problem Area & Purpose .............................................................................................. 4 1.2. The Research Question & Delimitations ............................................................................. 6 II: CONCENPTUAL AND THEORITICAL FRAMEWORK ......................................................... 7 2.1. The Concept of Incentives ................................................................................................... 7 2.2. Separation of firm Ownership and Control ......................................................................... 8 2.3. Scale- and Learning Economies ........................................................................................ 10 2.4. Labor Market Dualism Theory .......................................................................................... 11 2.5. Summary of Hypotheses .................................................................................................... 13 III: METHODOLOGY ....................................................................................................................... 14 3.1. Research Strategy ............................................................................................................. 14 3.2. Research Design ............................................................................................................... 14 3.3. Research Instrument ......................................................................................................... 15 3.4. Research Execution .......................................................................................................... 16 3.5. Ethical Considerations Statement ..................................................................................... 17 3.6. The Credibility Criteria ..................................................................................................... 17 3.6.1. Reliability: Internal Consistence & Stability ................................................... 18 3.6.2. Validity: Internal & External ............................................................................ 18 IV: RESULTS ...................................................................................................................................... 20 4.1. Composition of the Research Sample ................................................................................ 20 4.2. The incidence of motivation incentives ............................................................................. 21 4.3. H1: Job position ................................................................................................................. 22 4.4. H2: Bank size .................................................................................................................... 23 4.5. H3: Gender ........................................................................................................................ 24 4.6. Statistical Significance ...................................................................................................... 25 V: DISCUSSION ................................................................................................................................. 28 5.1. H1: Job position Analysis .................................................................................................. 28 2 5.2. H2: Bank size Analysis...................................................................................................... 29 5.3. H3: Gender Analysis ......................................................................................................... 30 VI: CONCLUSIONS & RECOMMENDATIONS ........................................................................... 31 6.1. Answering the Research Question and more ..................................................................... 31 REFERENCES .................................................................................................................................... 33 VIII: APPENDIX ................................................................................................................................ 36 8.1. The Self-completion questionnaire .................................................................................... 36 8.2. The Self-completion questionnaire (English version) ....................................................... 39 8.3. The Student Z-statistic test for α 10% ............................................................................... 42 8.4. The Cover Page ................................................................................................................. 42 3 I: INTRODUCTION Taken from the context of The Carrot and the Stick Theory of Motivation, carrots in a business and economics setting are traditionally rewards offered in form of money, recognition and any other financial or non-financial benefits with the intention of eliciting desired behavior from the receiver (Friedell, 2012). Isn’t that the puzzle every business-owner seeks to solve? — motivational devices or carrots that can bring the best out of their employees. In this research paper as it is entitled, we are strictly Counting Carrots… in central Stockholm with the intention to observe if the distribution of these devices varies for different groups of bank-employees given Job position, Bank size and Gender. This Section introduces and equips the reader with some background in- formation necessary to be able to grasp the content of the thesis. Also, statements on the problem area, purpose, research question, contribution to research and delimitation are presented and justified here as follows. 1.1. The Problem Area & Purpose Discussions on the association between motivation and performance in corporate organizations have increasingly dominated the field of human