Mary Kay Cosmetics Essay

Essay Mary Kay Cosmetics: Sales Force Incentives

1944 Words8 Pages

Mary Kay Cosmetics: Sales Force Incentives
Case Analysis

Mary Kay Cosmetics is a company known for providing women with exceptional opportunities for professional achievement and economic success and rewarding women for their success. Mary Kay Cosmetics uses several programs to motivate, recognize, and develop its beauty consultants, which include recognition in a monthly magazine, annual events, gifts and prizes and most importantly, financial incentives. At the heart of the financial incentives Mary Kay provides is the three car programs offered to beauty consultants at different stages of their career. The car programs have proven to be effective motivators; however the costs to the company have skyrocketed as the number of car…show more content…

Perhaps management should have considered the actual reasons beauty consultants were motivated to attain VIP status. According to the case study, Mary Kay aggressively advertises their Marketing Plan by enticing new recruits with promises of unlimited earning potential. Assume then, that beauty consultants, in trying to recruit new consultants are failing to convey to the new recruits the importance of founder Mary Kay Ash's original mission. This mission included not only economic success and professional achievement, but also personal development and independence for women. Beauty consultants who join the organization primarily because of the promise of material or social rewards are exhibiting extrinsically motivated work behavior. According to George and Jones (2005), employees who are extrinsically motivated perform the behaviors not for its own sake but rather for its consequences. In other words, these beauty consultants are reaching sales goals, not necessarily because they enjoy their work or value a sense of accomplishment, but rather because of the rewards they may be entitled to receive. Mary Kay's management must also consider the reasons their beauty consultants are motivated to reach certain levels of achievement in the organization. George and Jones (2005) explain that need theories may describe what motivates employees to behave certain ways and focuses on their needs as sources of motivation. It is also important for management to realize

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1. Use as many motivational theories as you can to explain why the reward system adopted by Mary Kay works in China?

a) Contingency Theory – Path Goal Theory or Goal Setting Theory
Path Goal Theory is a contingency approach to leadership which under Mary Kay’s responsibility is to increase subordinates’ motivation by clarifying the behaviours necessary for task accomplishment and rewards. Under Path Goal Theory it must be formed by tangible award. Mary Kay increases her follower motivation by either (i) clarifying the follower’s path to the rewards that are available or (ii) increasing the rewards that the follower values and desires.
As in the United States, top achievers are rewarded with jewellery and trips, but under Mary Kay…show more content…

She believes, if people perceive the rewards as equal to what others receive for similar contributions, they will believe they are treated fairly and will be more highly motivated.
However, when she tried to emulate its US-based reward system in China and surviving the direct sales, Mary Kay and other direct sales companies were hit by a central-government ban on all direct sales in year 1998. The ban effectively closed all companies using this sales method for several months and dropped 40%. The sales forced shrank dramatically.
Before the ban, Mary Kay labelled itself a ‘single-level’ direct selling company and sold its products through beauty consultants and sold them directly to the customer and had to meet a minimum sales target to remain active and can choose which products they wanted to buy and in what amounts.
But with new circular that is Circular on Related Issues Concerning the Selling Methods of Foreign-Invested Chain-Selling Enterprises issued by the Ministry of Foreign Trade and Economic Cooperation, the State Administration for Industry and Commerce, and the Bureau of Internal Trade, allowed direct sales companies to reopen if they sold goods only through retail outlets or promoters.
The circular stated that these firms could set up shops to sell their own goods, or sell through department stores. They would also have to provide after-sales services and fixed prices regardless of whether goods are sold at retail outlets or through promoters.

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