Mary Kay
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 winners as a percentage of beauty consultants has doubled, despite increases in program qualification requirements. The VIP car program is the main cause of concern for May Kay because of the large number of leased VIP cars, high interest rates and insurance premiums, and large losses on cars in service for short periods of time. Mary Kay's top management is now faced with finding a solution to rising program costs of their powerful incentive plan while maintaining sales force moral and motivation. The key issues that must be considered in finding a solution to the high costs of Mary Kay's Marketing Plan are how beauty consultants will respond to changes in the incentive plan and how implementing the necessary changes will affect the sales force. One of the problems Mary Kay's top management found with raising program qualification requirements as a solution to reducing program costs is that in created a "rush" by beauty consultants to attain VIP status before the effective date of the program change. This resulted in the number of leased VIP cars to increase temporarily instead of slowly decreasing. Perhaps management should have considered the actual reasons beauty consultants were motivated to attain VIP status. According to
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 winners as a percentage of beauty consultants has doubled, despite increases in program qualification requirements. The VIP car program is the main cause of concern for May Kay because of the large number of leased VIP cars, high interest rates and insurance premiums, and large losses on cars in service for short periods of time. Mary Kay's top management is now faced with finding a solution to rising program costs of their powerful incentive plan while maintaining sales force moral and motivation. The key issues that must be considered in finding a solution to the high costs of Mary Kay's Marketing Plan are how beauty consultants will respond to changes in the incentive plan and how implementing the necessary changes will affect the sales force. One of the problems Mary Kay's top management found with raising program qualification requirements as a solution to reducing program costs is that in created a "rush" by beauty consultants to attain VIP status before the effective date of the program change. This resulted in the number of leased VIP cars to increase temporarily instead of slowly decreasing. Perhaps management should have considered the actual reasons beauty consultants were motivated to attain VIP status. According to
Cited: Anonymous. (1991, January). Performance Through People Awards. Incentive, 165. Retrieved February 6, 2005, from ProQuest database. Ash, Mary Kay. (2000, September). Time For a Change. Workforce, 79. Retrieved February 6, 2006, from ProQuest database. George, J., & Jones, G. (2005). Understanding and Managing Organizational Behavior. New Jersey: Pearson Education, Inc. Lawler, Edward E. III. (1994). Motivation in Work Organizations. San Francisco: Josey-Bass Publishers. Locke, Edwin A. (2004). Linking Goals to Monetary Incentives. Academy of Management Executive, 18, 4. Schuster, J., & Zingheim, P. (2000). Pay People Right. San Francisco: Josey-Bass Publishers.