COUNTING CARROTS...: A quantitative cross-section study on the distribution of motivation incentives in Central Stockholm's banks according to bank-employees

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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

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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.

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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 resource management (HRM).

The driving-force behind this trend are arguably the numerous studies coming to light contest- ing that proper HRM should be viewed as a necessity if robust performance is to be elicited from employees (Francis, Liu, & Wang, 2019; Merriman, 2017; Rehu, Lusk, and Wolff, 2005;

Martin-Rios, 2014; Maksimović, 2014; Exley, 2013; Napier & Peterson, 1984; Kaya, Koc, &

Topcu, 2010; Laffont & Martimort, 2002;Davydenko et al., 2017.

On the other hand, these studies have not explicitly elucidated the meaning of proper HRM but have implied that it involves (among other things) adopting strategic and effective employee engagement benefits. The chief purpose for these benefits to serve is twofold.

One being to attract and retain competent staff. The other is motivating, engaging and boosting the morale of workers thereby mitigating negligent and opportunistic behavior in workplaces (Besanko, 2017). As Adam Smith once contested: “Labor was the first price, the original pur- chase – money that was paid for all things, and labor is the ultimate thing satisfying all de- mands” Smith (1776, 1.5.2, 47-8). This solidifies human capital as the backbone in the exist- ence of any business. That is, with a good team of motivated and dedicated employees, the firm

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Accruing awareness on the subject has witnessed an increase in the number of different forms of employee motivation incentives in working environments. In spite of what has been revealed here above, not enough attention has been directed towards exploring any poten- tial underlying variability in the distribution of motivation incentives in workplaces given different categories of employees.

Yet still, the quantity and quality of incentivizing devices vary a great deal on the basis of different factors such as culture, country, institutional framework, occupation and industry etcetera. Among studies exploring the distribution of motivation incentives, Rehu et al.

(2005) recognize distinct dissimilarities in the preferences of employee benefits between USA and Germany shaped by the difference in culture and in institutions. Davydenko et al. (2017) too conducted yet another profound research study on HR systems which also explores the distribution of motivation incentives.

Apart from the diversity of employee incentives from the perspective of bank-employees in Poznan, Poland, the above research examines in great detail HR components such as recruitment, forms of employment, motivation, professional education, e-learning, loyalty, stress, dismissal and outplacement. Davydenko et al. (2017) conclude that the type of bank (commercial versus cooperative), job position (managerial versus non-managerial) and gender (male versus female peers) have an effect on the number of incentivizing devices an employee has access to. That is, the first variable in each of the three categories above experiences greater incentives diversity than the other.

Inspired by Davydenko et al. (2017), we set out in this cross-section study to explore the distribution of employee benefits in Central Stockholm systematically basing that on on the position, size of employer and the gender of bank-employees. That is, we ask ourselves the question if there is any varying difference in the number of incentivizing benefits that different groups of bank-employees receive?

Concerning the theoretical contextualization to support the conclusions from the aforementioned study, Davydenko et al. (2017) do not provide very much to go by. To be more precise, only the dual labor market theory plus the concept of economies of scale are mentioned which is done in a very implicit and vague manner. This thesis intends therefore not just to compare what Davydenko et al. (2017) observed in Poznan, Poland to the outcome in Central Stockholm, but to also substantiate the theoretical deficiency in their article on incentives. This will be achieved by expanding the theoretical discussion on firm ownership-control separation, economies of scale and experience and the theory on labor market dualism in order to present

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Pursuant with all the above, this thesis aims to: (1) investigate and (2) subsequently identify any underlying distribution variability in the number of motivation incentives for different bank-employees (from an employee perspective) and (3) find out whether such variation is statistically significant. In so doing, this research makes notable contribution to conceptual knowledge on incentives as a key element used in boosting employee engagement. Satisfying this aim will be done by deducing three hypotheses on these variables: Job position, Bank size and Gender.

1.2. The Research Question & Delimitations

The research question is stated as follows: How does the distribution of motivation incentives for different employee categories in Central Stockholm’s banking sector vary, ac- cording to bank-employees? In order to be able to address the subject fully, we will use a set of three hypothetical assumptions which suggest some sort of variation in the distribution of motivation incentives with respect to the number of benefits offered to different groups of bank- employees; Managerial employees are motivated with more employee benefits compared to Non-managerial workers; Big banking corporations offer more motivation incentives to em- ployees than Small banks; Male employees are offered more motivation incentives than their female colleagues. In the next Section II, these hypotheses are developed and explained in con- nection to relevant theory.

This thesis is limited to studying motivation incentives only contrary to all other HR elements due to very limited time, cost involved and obviously restricted mobility because of the ongoing coronavirus pandemic (World Health Organization, 2020). In addition, even though employers do without doubt affect the distribution of employee engagement benefits, this research is constrained to only bank-employees in banking corporations of Central Stock- holm. Banks were chosen as the focus instead of any other sectors owing that to the enormous role these financial entities play in sustaining modern economies. Besides that, they were chosen in order to allow for comparability between this paper and the section about incentives from the HR systems in-depth study by Davydenko et al. (2017). Finally, it should be emphasized that we are not studying the quality and size of specific incentives but rather the number of different forms of employee benefits that different bank-employees have access to.

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II: CONCENPTUAL AND THEORITICAL FRAMEWORK

“The role of research is to test theories and to provide material for the development of law”, Bryman and Bell (2015, p. 27) hereby the deductive approach. This Section is focused on three elements of a social-scientific research study: the applied theoretical stance, relevant previous works and the process of hypotheses-deducing. The introduction sets the premises of looking at incentives as motivational devices in organizations along with a review on the definition and significance of such.

2.1. The Concept of Incentives

Motivation incentives, performance-based incentives, employee benefits, reward initiatives, positive reward, compensation schemes, engagement benefits, incentivizing devices, inducements or carrots, all these terms are used quite often and synonymously in various economics and business literature to refer to any motivation inducing tools that employees value (Merchant & Van der Stede, 2007). This paper does the same moving forward. Even though corporations can and do sometimes offer punishments normally by withdrawing positive reward for example by denying bonuses and passing over promotion opportunities according toMer- chant and Van der Stede (2007), this study focuses exclusively on positive inducements. In continuation, we would like to also mention that in this survey we are looking at employee benefits from a conventional standpoint, that is, the employer is responsible for administering and managing them (incentives) to employees without a third party administrative body involved.

Merchant and Van der Stede (2007, ch. 9), categorize incentive devices in two major groups: monetary versus non-monetary, and two subgroups: individual versus group-based incentives. Their explanations are embedded in their names and need ergo no further clarifica- tion. The most appearing incentive initiatives in workplaces used to motivate employees as observed by Merchant and Van der Stede (2007) are as follows: praise and recognition, partic- ipation in planning and decision-making processes, opportunities to promotion, education and training programs, vacation and education trips, flexible working hours, recreational activities i.e. gym and spa, company events, food provision, transport benefits i.e. work vehicles and parking space, housing provision, vouchers, child daycare, insurance payment plans, retirement

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payment plans, bonuses, company shares, stock options, financial convertibles, pay increase and collective employee benefits. While completing the questionnaire for Counting Carrots…, respondents were requested to submit those benefits from the list above that they had access to at their places of work.

The elementary reason why firms adopt incentives can be reinterpreted as being able to align employees´ natural self-interest alongside firm objectives (most important of which is profit maximization). This is done via three means: effort-inducing, effort-directing, attracting and retaining competent employees using generous incentives. Effort-inducing because offering generous incentive initiatives can evoke greater effort from employees. Allocat- ing extra resources to specific activities such as customer services often grabs the attention of employees by informing and reminding them of where more action is needed hence the term effort-directing. It is common for corporations to offer incentives that are comparably superior to those offered by their competitors. By doing so, firms succeed in luring and retaining a higher quality set of employees thus establishing a solid personnel control strategy (Merchant & Van der Stede, 2007, pp. 394-398).

Take note however that incentives do not work independent of one another (bonuses alone would not be effective) but rather in a complementary manner in order to maximize employee engagement and contribution towards firm goals (Manroop, Singh, & Ezzedeen, 2014).

2.2. Separation of firm Ownership and Control

Goergen (2012, p. 114) discusses modern economic systems bilaterally: bank-based and market-based economies. He suggests that even though both systems have co-existed for a long time, the former has financial banks as the traditional source of capital thus its source of investment whilst the latter sees stock markets as the principle source of financial equity. If or not this distinction affects the allocation of employee benefits in banks is not speculated upon by the author.

While examining the market-based economic structure, it was found that there are more than 1 000 000 registered businesses in Sweden as of 2019 according to Swedish Com- panies Registration Office (2019). Over 54% of these are joint-stock-companies, that is, they are owned by several shareholders through equity shares. The advent of trading shares via stock markets forever changed commercial business. It meant that the same stock of shares can change hands more than a dozen times in just a few minutes. During this process, company

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ownership becomes increasingly distributed and diffused subsequently divorcing it from firm control (Goergen, 2012, p. 9).

To escape the tragedy of too many cooks… due to many entrepreneurs and traders holding shares in the same firm, shareholders usually delegate the running and managing of the firm to a group of competent agents (Georgen, 2012). In this study, we refer to all agents with decision-making authority in a firm irrespective of hierarchical rank as Managers and all other employees as Non-managers. The preceding delegation means two things: that shareholders are excluded from issues pertaining firm management and that Managers are entrusted with the power to make important decisions on behalf of firm owners. From there, the divorce between firm ownership and control is ultimately materialized. Nevertheless, even though separating ownership from control solves one problem, the self-serving nature of employees may just as well lead to another.

In accordance with the words of Adam Smith: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest”, (Smith, Raphael & Macfie, 1982). Whilst shareholders aim at maximizing their profit, Managers by the same token irrespective of the company’s objectives wish to optimize their own personal gain. This conflict of interest between the principal(s) (shareholders) and agents (employees) in which one party (usually the employee) tends to put their goals above the other’s is referred to as the principal-agent problem (Besanko, 2017).

Agency problems thrive in our narrative because shareholders cannot observe the actions of Managers entirely and because they (Managers) have an information advantage pertaining firm management, this way fulfilling both conditions of the principal-agent problem:

moral hazard and asymmetric information (Besanko, 2017). In order to make sure that the self- serving nature of mankind suggested by Adam Smith does not consume Managers thereby leading them onto the path that forsakes their employer´s goals in pursuit of personal gain, companies normally offer generous and compelling economic compensation. This way attempting to align their interests with those of their employees particularly those with decision-making power (Besanko, 2017).

Ultimately, separating ownership from control leaves Managers in charge of the firm as the closest form of authority. From conventional wisdom, with authority comes relevance and importance therefore justifying the assertion that Managers have access to more em- ployee benefits than their subordinates. Purchasing two for the price of one, driven Managers are expected to keep the firm’s interests at heart especially managing other employees as necessary thus the first propounded hypothesis.

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H1: Managerial employees are motivated with more employee benefits compared to Non-man- agerial workers.

2.3. Scale- and Learning Economies

Theory asserts scale- and learning economies as advantages in cost that a business obtains due to expansion in production capacity and accretion in experience over time, respectively (Besanko, 2017). Growth in size and accumulation in experience constitute resource saving mechanisms that can give a firm competitive advantage over its competitors. The former is achieved from the ability to spread costs allover a large number of goods while the latter arises when overall efficiency improves by virtue of know-how build up. The intuitive assumption implied here is, large companies possess greater resource capacity which can explain why they are likely to vary employee benefits more than small firms.

Besanko (2017) discusses multiple advantages of scale and learning economies but considering the purpose of this study, only division of labor and specialization are raised. Divi- sion of labor occurs when the economic activity of an organization becomes too complex just so breaking it down into several functions is necessitated if larger return to production is to be maintained (Besanko, 2017). On top of partitioning performance into several functions such as capital budgeting, marketing, labor and personnel relations and so on, large companies are usually organized into diverse decentralized divisions which continues to support the process of labor division.

In large companies, the subsequent effect of labor division is often reflected by task specialization which is the contrary scenario in small firms with a few workers performing a greater variety of tasks that sometimes go beyond their specific roles. Employees in large companies have the opportunity to focus on particular distinct tasks, improve the skillset necessary to perform those tasks until they specialize. For example, managerial duties are often delegated to an accounting manager, marketing manager, HR and personnel relations manager or more of the same. Correspondingly, task specialization is resource saving because it improves the efficiency at which different duties are being performed thereby easing the action of cutting down on overall costs. In addition, elevated levels of performance efficiency translate into increased productivity which is very much linked to greater economic compensation (Besanko, 2017).

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The preceding remarks should not however be interpreted as though they are claim- ing that small firms cannot realize these scale and learning economies but with respect to organizational structure, time on the market and operative complexity, big companies acquire these advantages on a far superior scale (Besanko, 2017).

While employees in small firms may be constrained by limited resources to a few standard benefits, large companies have the necessary capacity required to be able to vary these benefits provided labor division and task specialization lead to increased performance efficiency and productivity. Altogether, the joint role of growth in size and greater efficiency re- sulting from division of labor and specialization mean that big companies can hold much more resources at their disposal than small firms thus the second propounded hypothesis.

H2: Big banking corporations offer more motivation incentives to employees than Small banks.

Nevertheless, from time to time the bigger they are, the harder they fall attests to being more than just an expression as the Lehman Brothers have proven historically. Hence, size should not always be associated with everlasting fortunes because on the other side of scale economies exists diseconomies of scale.

By Big banks, this research refers to the six biggest banking organizations on the Swedish banking market today based on their market share. These include in no particular order: Nordea Bank Abp, Swedbank, Svenska Handelsbanken, Skandinaviska Enskilda Banken (SEB), Länsförsäkringar Bank and Danske Bank A/S (Swedish Bankers´ Association, 2019).

These six alone combined take up more than 62% of the entire market that is otherwise made up of 124 operative firms as of 2018 (Swedish Bankers´ Association, 2019). Conversely, six firms by virtue of being outside this Big banks bracket were viewed as Small banks namely:

FOREX, Skandia, Avanza, Bluestep, Den Norske Bank (DNB) and Santander Consumer bank.

2.4. Labor Market Dualism Theory

“The compartmentalization and isolation of different groups of participants in the labor market – which is evoked, for example, by the concepts of non-competing groups and balkanization […]”, is referred to as labor market segmentation(Wilkinson, 1981, p. 4). This

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definition clearly highlights an example of labor market failure due to biased treatment of comparable individuals with similar achieved productive potential with respect to access to employment, pay increase, compensation and opportunities to training. Wilkinson (1981, pp. 5-10) asserts that such balkanization happens to workers seeking employment (pre-market segmentation) just as to those already in the labor market (in-market segmentation). While seeking clarity regarding the nature of incentives heterogeneity in the banking sector in Central Stock- holm, the focus was directed upon the latter segment.

Subsidiary to the concept of in-market segmentation, labor market dualism is yet another form of balkanization. Dualism as the term suggests has two sides to it, a primary sub- market whose employees (favored workers) have access to more employee motivation benefits for any given labor quality accompanied by higher returns to increase in labor quality, and a secondary submarket whose employees (unfavored workers) experience the typical opposite (Wilkinson, 1981, pp. 8-10). Instinctively, this reasoning reminds us of H1 which assumed that managerial employees are incentivized more diversely. This could mean that most of these employees are in the primary submarket contrary to their subordinates.

It is worth stressing that this distinction made by Wilkinson between a primary and a secondary submarket is not the same as assigning different occupations under different categories as dictated by social norms i.e. white-collar versus blue-collar jobs. On the contrary, Wilkinson (1981, pp. 5-7) insists that all sorts of jobs, regardless, be it lower-class or clerical, all have this duality attribute of distinction. Duality is exposed in form of labor quality henceforth the issue of “secondariness in employment is then strictly applicable, too, to any highly qualified worker who receives significantly lower job reward than comparable members of their peer group” (Wilkinson, 1981, p. 8).

Furthermore, Doeringer and Piore (1970, p. 360) argue that female workers are overrepresented, though not exclusive, in the secondary submarket of primary jobs compared to men ceteris paribus. According to this, female workers should in general then have limited access to primary employment, economic reward, opportunity to training and promotion com- pared to men. Why this disparity exists is not the theme of this thesis, nevertheless, it will be mentioned here that Doeringer and Piore (1970, p. 360) attribute such historically toward polit- ical attempts by corporations to divide and conquer in order to undermine and weaken labor unions in the early 1900s.

If we are to follow the aforementioned disparity conviction by Doeringer and Piore (1970) and Wilkinson’s (1981) reasoning that employees in the secondary submarket are seen as unfavored or less advantaged workers, it becomes apparent that employees in this submarket

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are motivated with far less employee motivation benefits in comparison to the primary submarket. Moreover, if the majority of workers in the secondary submarket are female as suggested by Doeringer and Piore (1970), that implies that the majority of employees in the primary submarket are male thus this thesis’ third and final hypothesis.

H3: Male employees are offered more motivation incentives than their female colleagues.

The recent Global Gender Gap Report 2020 carried out by the World Economic Forum (2020), ranks Sweden the fourth most equal country in the world in terms of gender whilst Poland lies in the fortieth place. In the same vein, in Sweden, women have generally surpassed men in attaining higher education (Statistics Sweden, 2015), and this should coun- teract Doeringer and Piore´s previous argument in the Swedish setting. Considering these two factors, it is fair to expect that the variation in the distribution of motivation incentives in Cen- tral Stockholm given gender should be substantially minor than that of Poznan as observed Davydenko et al. (2017). That is, the nature of the distribution of motivation incentives offered to female bank-employees should not be significantly different from that of their male colleagues.

2.5. Summary of Hypotheses

In order to fully examine the research question stated in Section 1.4, a set of three hypotheses was put to test: [H1]:Managerial employees receive more motivation incentives than non-managerial workers.[H2]:Big banking corporations offer more motivation incentives to employees than Small banks. [H3]: Male employees are offered more motivation incentives on average than their female colleagues.

Just like studies conducted by Davydenko et al. (2017) and Rehu et al. (2015), these hypotheses jointly predict that the distribution of employee benefits to different groups of workers varies in number on the basis of position, bank size and gender from the view of bank- employees. However, there is always the possibility that more economic theories on the subject that may or may not oppose the assumptions made here definitely exist at large which leaves room for a range of contrasting hypothetical cases on the topic. Therefore, this is not an exhaus- tive literature review but a compelling case on the allocation of motivation incentives.

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II: METHODOLOGY

Relying on Bryman and Bell´s (2015) recommendations, this Section covers a roadmap of the procedure and the rationale behind decisions taken in the due process of conducting this social survey. Implications for such just like ethical considerations are discussed. Towards the end, an examination of the level of credibility of the thesis is presented.

3.1. Research Strategy

In what concerns strategies of social research, conclusions can be arrived at either qualitatively or quantitatively. The former emphasizes words whereas the latter emphasizes quantification (Bryman & Bell, 2015, pp. 37-39).

This study aimed at quantifying variation in motivation incentives which called for a good number of observations with respect to the law of large numbers thus adopting the quantitative strategy.The law of large numbers, in statistics, states that as a sample size grows normally beyond 30 observations, its mean gets closer to the average of the entire population thus increasing chances to making credible inferences (Lind, et al., 2017, pp. 137-138).

Using any qualitative research method such as a structured interview combined with a self-completion questionnaire would arguably reveal similar conclusions. However, inter- views require excessively a lot more time and cost, all things equal, compared to questionnaires (Byman & Bell, 2015, p. 186) hence the choice to go with one quantitative instrument.

On similar grounds, concerns about objectivity pertaining respondents’ unaffected reaction from the side of the researcher necessitated the choice of a quantitative research strategy.

3.2. Research Design

The choice of research design according to Bryman and Bell´s (2015, p. 49) should reflect decisions about the priority being given to a range of different dimensions of research. Particu- lar importance attached to the following constructs should be clearly expressed in the choice of

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design; expressing causal connection between variables;generalizing to larger groups of indi- viduals than those actually forming parts of the investigation;understanding behavior and its meaning in a specific social context;having a temporal (i.e. over time) appreciation of social phenomena and their interconnection (Bryman and Bell, 2015).

On account of the deduced predications and in connection to the above criteria, one design was adopted from the possible five: experimental, longitudinal, case study, comparative study and cross-section survey, reviewed by Bryman and Bell (2015, ch. 3).

Considering the lack of interest in: causality, various time periods, a single case study and twofold populations, this investigation deemed the cross-section design most fitting to serve its purpose. Re-stating that as being able to draw associations about the heterogeneity in the distribution of incentives as perceived by bank-employees of Central Stockholm. The latter and this definition of a social survey design fitted very well: “collection of data on more than one case and at a single point in time in order to collect quantifiable data in connection with two or more variables which are examined to detect patterns of association”, (Bryman &

Bell, 2015, p. 62).

3.3. Research Instrument

For this quantitative investigation, a self-completion/self-administered questionnaire, was employed for data collection mainly because it is the same tool that Davydenko et al. (2017) used. In addition, concerns about time and cost involved prompted the use of a self- completion question contrary to any qualitative instrument.

The self-administered questionnaire was structured in Swedish accordingly mainly because after consulting with several banks around Central Stockholm, a convincing number of them responded that most of their staff had a descent grasp of the language. Moreover, even Davydenko et al. (2017) used Polish in the same way because their study was set in Poland.

To come around some shortcomings of using questionnaires especially risk for varying interpretation of questions by different respondents, two pilot studies were conducted.

These composed of 30 respondents each, most of whom were close friends, students and neigh- bors. The main objective of these pilot studies per se was not to act as indicators for results from the main study but rather to reveal major inconsistencies regarding the interpretation of the questionnaire. Thanks to them, leading questions among other issues were avoided in regards to respondents’ subjective perceptiveness of incentive devices.

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The final self-completion questionnaire consisted of four open and nine closed questions. The first part of the questionnaire defines the composition of the sample whilst the second part is dedicated to the distribution and attitudes on motivation incentives.

The complete self-administered questionnaire (English version) used during this survey study is present in the Appendix section subsection 8.2.

3.4. Research Execution

Deciding on the appropriate site to conduct the survey was based on three factors:

(1) limited time and other resources, (2) convenience and (3) availability of relevant respondents. The allocated time to conduct the research as whole was less than three months (between March and May 2020). The latter and the cost involved, not leaving out limited mobility due to the corona virus pandemic (World Health Organization, 2020), restricted this research to Stock- holm. Because of the coronavirus crisis, most of the small banks such as Citi, Ålandsbanken and Collector had their offices closed to the general public. This and the former prompted for a non-probability approach in form of convenience sampling in order to guarantee an acceptable number of respondents that would satisfy the purpose of the study. These factors together and a very low response rate to questionnaires at workplaces (Bryman and Bell, 2015), justified going with a convenience sample despite its lack of representativeness. This implies that even though this thesis was interested in all bank-employees in Greater Stockholm, the final sample constitutes only of those that worked in the inner-city, home to the researcher.

If or not the pandemic impacted the allocation of employee benefits was not important in trying to establish if there exists some sort of disparity in the distribution of motivation incentives in Central Stockholm´s banking sector. Nevertheless, Dagens Industri, a Swe- dish business-oriented newspaper reported on June 16, 2020 that overall healthcare insurance contracts signed by employers had risen by 20% between January and May in comparison to the same period in 2019 as a result of the ongoing pandemic (Bolander, 2020). Why? Employers want their employees to receive the necessary healthcare attention as fast as possible without having to wait forever in the surging queues of the Swedish healthcare system (Bolander, 2020).

That way, employees can get back to work within the shortest period possible following a sick leave.

Both a printout and an online version via Google Forms of the questionnaire were available for the convenience of the respondents. The link to the digital version is available on

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the following webpage: https://forms.gle/56vSWJJmRGNu7Taa6. The survey was administered between April and May 2020.

Due to lack of alternative methods, the questionnaire was administered directly via physical visits to banking offices by the researcher. Besides this and posting, respondents were approached via social media outlets such as Facebook, LinkedIn and work e-mails. After a few respondents, the snowball sampling technique proved to be a very practical means of gathering additional observations.

Snowball sampling refers to collecting data by using colleagues or any other con- tacts close to the circle of the initial respondents (Bryman & Bell, 2015, 651). It is a relatively simple and handy method which does not generate high research cost yet it allows the possibility of reaching a wider population.

3.5. Ethical Considerations Statement

A cover letter to accompany the self-administered questionnaire was drafted with respect to ethical guidelines proposed by Bryman and Bell (2015, pp. 154-155). This was done as it is fundamental in social scientific research to acknowledge such principles in order to ensure the credibility of the reached conclusions. Below is a list of a few of Bryman and Bell´s ethical considerations checklist that were considered during the formulation of the cover letter:

o Full consent should be obtained from the participants prior to the study.

o The protection of the privacy of research participants has to be ensured.

o Adequate level of confidentiality of the research data should be ensured.

o Anonymity for individuals and organizations participating in the research has to be ensured.

o Ensuring that no harm comes to the participants

3.6. The Credibility Criteria

Now let us take a closer look at reliability and validity of this quantitative study.

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18 3.6.1. Reliability: Internal Consistence & Stability

Reliability is a term of estimation for the consistency of a research measurement (Bryman & Bell 2015). Stated differently, to what extent is the overall study replicable or re- peatable given similar conditions? For the findings in Section IV (or from any quantitative re- search for that matter) to be deemed reliable, the same respondents need to provide the same responses each time the same questionnaire is administered under the same conditions. Esti- mating reliability can be done by analyzing two research features: Internal consistence and Stability.

The review on literature in Section II has indicated clearly that motivation incentives may vary on the basis of Job position, Bank size and Gender. Likewise, some of the previous work on variation in incentives by Davydenko et al. (2017) and Rehu et al. (2015) has to a varying degree employed similar explanatory variables despite distinct aims. The above studies were conducted in different countries, Poland and Germany respectively and with a year in between yet still they have in some ways been comparable to the findings from this quantitative study. This association indicates that these parameters indeed reliably measure the concept intended, that is, incentives variability thus satisfactory internal consistency.

Naturally, Gender is one of the most stable and consistent explanatory variables in research given biology. Regarding Job position, the norm is such that employees usually have to earn their way to a promotion and a lot of times this calls for a compelling résumé among other things. On similar grounds, Bank size which is in most cases associated with greater cost advantages takes long time more than anything to achieve. Moreover, the banking industry is naturally rather conservative compared to others. All things considered, a test-retest estimation of reliability also known as a stability test would with authority be consistent with the results presented in Section IV.

3.6.2. Validity: Internal & External

Internal validity is interested in implying a causal effect or relationship between variables and more importantly the significance of such observed effects on the studied con- struct (Bryman & Bell, 2015). This cross-section study on the other hand was interested in proposing associations about variation in incentives according to bank-employees contrary to causal effects. Even so, among threats to internal validity is failure to randomly assign observations in order to ensure representability for the broader population. Yet still this standard

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could not be met mostly because of limited mobility due to WHO´s recommendations to assist in combating the then ongoing pandemic, cost involved, scarce time and other resources to assist in conducting the study. As a result, weak internal validity has no significant negative effect to the credibility of the results provided in Section IV.

External validity on the other hand helps to answer the question: to what extent outside the sampled observations are the drawn generalizations rationally and effectively applicable too, to other subjects as well as time and scenarios? (Bryman & Bell, 2015) A non-random sample as the one used in this study is viewed as non-representative of a whole population (Bryman & Bell, 2015). In addition to that, the findings from this study were produced from 58 observations which is equivalent to only 0.2% of all 38 000 bank-employees in Sweden as of 2018 (Swedish Bankers´ Association, 2019).

Expanding the sample would therefore in some cases perhaps sway the findings in another direction than that presented in Section IV. These two defects lower the confidence of external validity. However, with regards to corporate structure and the tasks performed by these entities, the banking sector is not that volatile and this reinforces the confidence of this study’s external validity. Subsequently, the generalizations generated in this study may not be effectively applicable to the whole of Sweden because of sampling defects but they certainly are to Greater Stockholm.

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IV: RESULTS

Concise and brief, this Section is dedicated to presenting the chief findings from this social survey through tables and charts before any formal explanation or detailed discussion can be engaged.

4.1. Composition of the Research Sample

The questionnaire was administered to 157 bank offices around central Stockholm:

63 via online and 94 via physical visits, 58 observations have been submitted. The biggest challenge faced during the phase of data collection was an extremely low response rate towards the survey.

The complete self-administered questionnaire for this survey is present in the Ap- pendix section subsection 8.1. Table 1 below contains key numbers about the composition of the research sample such as gender, highest attained education, job position, branch among others.

Table1. Summary of the sample structure

Source: Data from own survey

Criterion Category Number of observations Percentage … ….

Consent Granted 58 100%

Gender Female 31 53.4%

Male 27 46.6%

Education Elementary 0 0%

Highschool (major in economics) 8 13.8%

Highschool (other) 3 5.2%

Vocational 7 12.1%

University (major in economics) 26 44.8%

University (other) 14 24.1%

Position Managerial position 18 31%

Non-managerial position 40 69%

Unit Headquarters 20 34.5%

Regional office 38 65.6%

Bank size Small bank 26 44.8%

Big bank 32 55.2%

Statistics Minimum Maximum Mean Median Standard deviation

Age 22 59 28.7 26.5 28.7

Experience in banking 0.25 40 7.4 4 9

Size of employees 4 1500 57.1 19 175.2

Number of incentives 1 20 10.5 10.5 5.9

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4.2. The incidence of motivation incentives

Chart 1 displays the incidence of different forms of motivation incentives used by different banks in Central Stockholm according to our survey data. From it (Chart 1), we can see how often or rare a particular incentivizing device was submitted during the survey. Ac- cordingly, we observe the most used forms of employee benefits to motivate workers as recreational activities (gym and spa for example) followed by food provision and pay increase.

Training programs, insurance and retirement payment plans are also among the most common ways of motivating bank-employees in Central Stockholm.

From the other end of the spectrum, stock options and financial convertibles, child daycare, vacation and education trips and company events are very rare, again in accordance to survey data. Other represents all benefit(s) that an employee had access to but was/were not included in the survey. The most appearing under this category was benify; a collective platform for engagement benefits employed by different companies.

The reasons and justification behind this particular disposition of the distribution of incentives (Chart 1) was not looked into during this study. Instead, this study intended at examining the thought whether the distribution of motivation incentives for different groups of bank- employees varied from an employee perspective. Thus this study can neither explain nor justify why the distribution of motivation incentives appears the way it does in Chart 1.

Chart 1. The incidence of employee benefits for different groups of bank-employees Source: Data from own survey

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4.3. H1: Job position

H1 assumed that all employees in managerial positions regardless of hierarchical rank experienced a higher variation in the distribution of incentives than their subordinates.

This study has failed to produce sufficient empirical proof to corroborate this assumption.

Chart 2 illustrates the distribution of employee benefits between Managers; represented by the blue bars and Non-managers; represented by the orange bars. In the research sample (58 observations), the response rate relates employees in managerial positions to employees in non-managerial positions as a ratio of 1: 2.3.

The majority of respondents regardless of job position were those motivated with 3 to 7 incentives (66.7%, 65% of Managers and Non-managers respectively). Starting at 3 incentives, the number of employees increases and then starts to fall after 5 employee benefits. Em- ployees with access to 12 or more incentives was a very rare group; there were no observations for 2, 12 and between 15 to 19 incentives. From both groups, the biggest percentage of employees were those with access to highest 5 incentives: 22.2% ;17.5% of Managers and Non-managers respectively.

Regarding level of satisfaction, 100%; 87.5% of Managers and Non-managers respectively felt they were contended with their employee benefits. 44.4% of Managers and 75%

of Non-managers perceived the number of incentives as a significant factor in their choice of employer given similar conditions. Similarly, 44.4% of Managers perceived this factor none significant in contrast with only 12.5% of Non-managers. As far as a higher variation in incentives to Managers than not is concerned, we cannot conclusively observe such association from Chart 2.

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Chart 2. The distribution of employee benefits on the basis of Job position Source: Data from own survey

4.4. H2: Bank size

H2 evaluated if bank size had a significant effect on the distribution of employee motivation incentives. This research has concluded that bank size has indeed a noticeable impact on the number of benefits bank-employees are motivated with which is in harmony with the assertion implied in H2, that is, employees in Big banks are offered more motivation incentives than employees in Small banks.

Chart 3 reports the findings on the allocation of incentives with reference to Big and Small banks; depicted by the blue and orange bars respectively. As the number of motivation incentives rises beyond 5 devices, the number of recipients decreases yet still in the range of 7 to 20 benefits, Big bank-employees are the more numerous group. The biggest share of Big bank-employees 18.8% had access to 5 benefits at highest whilst Small banks had the same share of 19.2% on both 4 and 5 devices.

Irrespective of size, the majority of bank-employees were motivated with 3 to 7 devices which is equivalent to 53.1% of Big bank-employees and 69.2% of Small bank-employee. On 2, 12 and between 15 to 19 benefits, there were no observations at all despite an outlier with access to 20 devices from a Big bank. Regardless of bank size, the majority of respondents agreed to the statement that the number of incentives matters for the choice of

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11.1 22.2

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5.6 5.6 11.1

5.6 5.6 5.6

2.5

12.5 10

17.5 15

10

2.5 10

7.5 5

2.5 2.5 2.5

0 5 10 15 20 25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Percentage of employees

Number of incentives

Managers Non-managers

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Considering contentment with the offered benefits, results indicate that 93.75%;

88.46% of Big and Small bank-employees respectively were content. Even with a shy 10%

dominance by Big bank-employees, we see that in conformity with Chart 3 bank size affects number of employee benefits.

Chart 2. The distribution of employee benefits on the basis of Bank size Source: Data from own survey

4.5. H3: Gender

The purpose of H3 was to investigate whether the distribution of incentives was strongly dependent on gender. That is, is there greater variation in the number of motivational devices male workers have access to than there is for female colleagues? This thesis has not succeeded in providing us with plausible empirical evidence significant enough to confirm the above suggested disparity in employee benefits between men and women.

If anything about this disparity, Chart 3 reveals a more or less homogeneous dis- tribution of motivation incentives between male and female bank-employees described by the blue and orange bars respectively. The greatest share of respondents regardless of sex had access to the range of incentives between 3 to 7 which corresponds with 51.8% of males and 64.6% of females. The vast majority of respondents of both sexes were motivated with highest

6.3

3.1 3.1

18.8 15.6

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6.3 9.4

6.3 6.3 6.3

3.1 3.1

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15.4

19.2 19.2

7.7 7.7 3.8

7.7 7.7

3.8 3.8

0 5 10 15 20 25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Percentage of employees

Big banks Small banks

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5 motivational devices which is equivalent to 22.2% of men and 19.4% of female employees.

Female employees dominated this category with a 6.8% margin over men.

In general, Chart 3 follows suit to the trend in the previous two graphs where the number of recipients for a number of benefits falls markedly after 5 devices. However, beyond 5 incentives the occurrence of both sexes is for the most part uniform.

Equivalent to 90% versus 88.9% of the total share of men and women respectively felt contended with the number of motivation incentives they had access to. 77.4% of men and 59.3% of women felt that the number of incentives does not matter in their choice of employer given similar conditions. From Chart 3 and with all results considered, we could not with authority declare that there is in fact an underlying significant variation is number of incentives when considering gender.

Chart 3. The distribution of employee benefits on the basis of Gender.

Source: Data from own survey

4.6. Statistical Significance

In order to test for the statistical significance of the above presented results, the Student Z-test for a two sample average and a p-value were calculated. The Student statistic test for hypotheses indicates whether the findings from a study are either due to random chance

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11.1

22.2

11.1

7.4 7.4 14.8

7.4

3.7 3.7 3.7 3.7

3.2

12.9 12.9 19.4

9.7 9.7 9.7

6.5 6.5 6.5

3.2

0 5 10 15 20 25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Percentgae of employees

Males Females

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or are in fact plausible within a relevant level of statistical confidence (Bryman & Bell, 2015).

A p-value tells us on the other hand “the probability of observing a sample as extreme as, or more extreme than, the value observed given that the null hypothesis is true” (Bryman & Bell, 2015).

The null hypotheses proposed that there was no significant or zero difference in the average number of motivation incentives for each paired group of employees in all three explanatory variables. The alternative hypotheses suggested otherwise that incentives varied in accordance to what was implied in the study hypotheses in Section II.

Listed below are the null and alternative or research hypotheses:

Null hypothesis for Job position H0: There is no difference in the average distri- bution of employee benefits between Managers and Non-managers

Research hypothesis for Job position H1: Managers receive more motivation incentives than Non-managers

Null hypothesis for Bank size H0: There is no difference in the average distribu- tion of employee benefits between Big banks and Small banks

Research hypothesis for Bank size H1: Big banks offer more employee benefits than Small banks

Null hypothesis for Gender H0: There is no difference in the average distribution of employee benefits between Male and Female bank-employees

Research hypothesis for Gender H1: Male bank-employees are motivated with more employee benefits than Females employees.

Table 2. The Student Z-statistic test for an α of 5 %

Student Z-test: Two sample Managers Non-managers Big banks Small banks Males Females

6.111 6.85 7.563 5.923 6.290 7.481

Known variance 10.34 13.208 15.157 8.634 8.146 15.798

Observations 18 40 32 26 31 27

Hypothesized Mean Difference 0 0 0

Level of confidence => α 0.05 0.05 0.05

Critical z-value one-tail 1.645 1.645 1.645

P(Z<=z) value one-tail 0.219 0.034 0.098

Calculated z-value -0.777 1.826 -1.294

Source: Data from own survey

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A one-tailed test was used since this study was testing for the possibility of the relationship in only one direction thus completely disregarding the possibility of a relationship in the other direction. That is, if a specific group of employees enjoyed greater variation in the distribution of motivation incentives or not.

Table 2 reports the test results and p-values for each group of respondents. At the standard level of confidence: 5%, test results for the explanatory variables: Job position reported in column 2 and Gender reported in column 6 were none significant statistically (Table 2).

Hence we could not afford to reject their null hypotheses that suggested zero difference in the distribution of incentives between Manager versus Non-managers, and between Males versus Females.

In contrast, test results for Bank size indicated a statistically significant difference for variation in the allocation of employee benefits between Big and Small banks thus allowing the null hypothesis that stated a zero difference in incentives distribution between these two groups to be rejected. That is, the calculated z-value 1.826 for Bank size was greater than the critical value 1.645 and the p-value 0.034 for the same variable above was less than the 0.05 level of confidence.

All results considered, we concluded with authority that in all studied cases, only bank size had a statistically significant effect on the distribution of employee benefits. Further statistical evidence at the 10% level of confidence that is consistent with the above conviction is presented in Table 1 of the Appendix section subsection 8.3.

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V: DISCUSSION

In this Section, the findings are analyzed with respect to relevant theoretical constructs. No- ticeable differences between the applied theory and practice on the distribution of employee benefits are explained objectively and speculatively. Similar subheading from the previous Sec- tion are used here in order to enable the reader to follow the analysis easily.

5.1. H1: Job position Analysis

The results revealed that employment status had no significant impact on the employee’s number of incentives which was consistent with neither relevant theory nor the previous study by Davydenko et al. (2017). It was argued that Managers are relatively more important (than other workers) in the business operation of any firm because of the divorce between firm ownership and control. In support of the same assumption, Davydenko et al. (2017) found out in Polish banks of Poznan that Managers had access to more motivation incentives than Non-managers. It was therefore very surprising when the results on Job position from this survey failed to depict the aforementioned conviction in the variation in the distribution of motivation incentives.

On the other hand, it is hardly any riddle that because of relative relevance as explained in subsection 2.2, Managers are paid higher wages than their subordinates. The reason for this has to do with proximity of authority and the decision-making power invested in Man- agers. To make sure that the decisions made are in the best interest of shareholders, Managers are therefore normally paid and compensated for generously as a way of aligning their interests along those of the company; profit maximization. In light of this, Managers may not show interest in the number of incentivizing devices offered to them henceforth the reason why some of them submitted a lower number of incentives than Non-managers.

An interesting reflection upon these findings relates to variation in managerial roles according to department, size of office, nature of employment and the scope of responsibility.

Such factors and more can have an effect on the distribution of motivation incentives. With this in mind, it could be a mere coincidence that all surveyed Managers had very inferior roles almost at the same level as all other respondents thus the lack of noticeable variation in the distribution of employee benefits in this category. Nevertheless, this research overlooked this

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detail by looking at all sorts of Managers under the same group which may have swayed the results into the direction revealed in subsection 4.3. Let alone there is always the issue of interpretation where some respondents may have submitted only those incentives they were utiliz- ing, forgetting that question 10a (questionnaire in subsection 8.2) clearly asked them to choose all devices that they had access to.

5.2. H2: Bank size Analysis

Of all the three hypotheses propounded to explore the distribution of incentives to different groups of bank-employees in Central Stockholm, only this one (H2) was substantiated with convincing empirical proof. Even though they dominated the sample slightly by a 10%

margin, employees from Big banks were the most occurring group in the 7 to 20 employee benefits range. This observed large incentives variability in relation to Bank size was also further confirmed by the statistical tests on a confidence level of 5% and 10%.

The theoretical explanation as to why Big bank can afford to vary employee motivation benefits more on average than Small banks was because they have bigger resource capacity and because they can acquire scale and learning economies at greater length than small firms, this research asserted. Embedded in these scale and learning economies emerging from the division of labor and task specialization are cost and resource saving mechanisms that allow big firms to assemble and possess more resources. For instance, expansion in production capacity distributes costs across various units thereby making the production process less cost intensive. Moreover, the accumulation in knowledge and know-how elevates the efficiency of performing particular tasks which saves the firm time, money and other resources.

It should be emphasized once again that Small firms can also acquire economies of scale and experience but at a limited scale in comparison to larger firms. Small firms such Collector bank usually have the same employee responsible for marketing, recruitment and personnel relation which may obstruct efficiency and limits the person in charge from special- izing in a particular task.

Conversely, because of organizational complexity, Big banks such as SEB have to delegate management and other operations to different department each with some different separate set of employees. In the HRM department for instance, a personnel and relations manager makes sure that the wellbeing of all company employees is as good as it can possibly be.

In so doing, large firms surpass small ones in obtaining scale and learning economies. Whereas

COUNTING CARROTS...: A quantitative cross-section study on the distribution of motivation incentives in Central Stockholm's banks according to bank-employees