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Motivation is, per se, a key ingredient in every organization and, like beauty is in the eyes of those who are looking, the latent, maybe unconscious subjectivity of managers as decision makers in perceiving the importance of both formal and informal rewards might bias their effective allocation, altering further their efficiency for each and every employee. As an organization disconnected from any business environment, with very few monetary incentives above the fixed wage, military developed a rewarding system with clear formal rewards, sorted in an ascending order by official regulations and limited in options. As this is the most important motivational tool to keep both the morale and the discipline very high, the rewards’ effectiveness is crucial for the commanders as decision makers, in order to obtain the desired motivational level. The main aim of this paper is to determine to what extent the perception of the decision makers’ over the formal rewards’ efficiency is reinforced by the existence of the informal rewards. To assess the influence of different perceptions on the importance of both formal and informal rewards, the cluster method is adapted. Thus, the results derived from the experiment described in this paper represent an indicator of the sensitivity of the cluster method, in which intangible categories are grouped according to their perceived importance, instead of the physical comparison of entities.

The Impact of Cluster Setting on the Perceived Importance of Formal Versus Informal Rewards