Motivating Without financial Incentives : Leadership Practices for Intrinsic Motivation in Banking

This thesis explores how leaders motivate employees without relying on financial incentives, focusing on a qualitative case study within a Swedish banking institution. As traditional monetary rewards lose effectiveness in sustaining long-term engagement, especially in knowledge-intensive sectors, non-financial motivators such as recognition, autonomy, purpose, and trust have gained importance. Drawing on interviews with both leaders and employees, the study investigates leadership behaviors and organizational practices that support intrinsic motivation. The findings reveal that effective motivation is achieved through human-centered leadership—characterized by empathy, ethical role-modeling, and individualized support—and by cultivating a work environment that fulfills employees’ psychological needs. The study is grounded in Herzberg’s Two-Factor Theory, Hackman and Oldham’s Job Characteristics Model, and Self-Determination Theory, providing a multidimensional analysis of motivation. It concludes that while financial compensation is a necessary baseline, sustainable motivation depends on relational and purpose-driven leadership. The research offers practical insights for organizations seeking to enhance engagement without expanding financial incentives.