Mary Kay Cosmetics: Sales Force Incentives Case Analysis

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  • Topic: Motivation, Mary Kay, Multi-level marketing
  • Pages : 8 (2850 words )
  • Download(s) : 1032
  • Published : January 29, 2011
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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 Inc. it has given out three (3) Shanghai-made pink Volkswagen Santanas. For promoters, recognition is based on sales; for directors, recognition is based on the sales they make and those generated by the promoters they trained and counselled. b) Two Factor Theory – Frederick Herzberg

Another Mary Kay motivational theory why reward system has been adoption is under Frederick Herzberg. This theory developed another popular needs-based theory of motivation called the two-factor theory where:

(i) 1st dimension – hygiene factors
It involves working conditions, pay, company policies and interpersonal relationships. For example Mary Kay offers business opportunities to chinese woman otherwise is very hard to find in China. Mary Kay also allows women to work either full-time or part-time to supplement their income.

(ii) 2nd dimension – motivators
It involves job satisfaction and meeting higher-level needs, such as achievement, recognitions and opportunity growth. For example any successful sales promoters upon obtaining a business license and signing ‘Mary Kay Distributor Agreement’, they can become business consultants and chief business consultants.

The followers without much experience, Mary Kay gives free training of its sales promoters. For new promoter, they can learn and understand the basic requirement of their position. For new directors and distributors can learn basic business development and management. Then more-experienced can learn leadership skills and management techniques.

Also for top achiever, has given out three (3) Shanghai-made pink Volkswagen Santanas. For promoters, recognition is based on sales; for directors, recognition is based on the sales they make and those generated by the promoters they trained and counselled.

c) Equity Theory
Equity theory proposed that people are motivated to seek social equity in the rewards they receive for performance. According to the theory, May Kay believe if people perceive their rewards is equal to what others receive for similar contributions, they will believe they are treated fairly and will be more highly motivated. There are 4 types of equity theory can be explained to compare whether they are being treated or not: (i) Self-insight

(ii) Self-outsight
(iii) Others-insight
(iv) Others-outsight
But in Mary Kay, type of equity theory can be explained is others-outside where Mary Kay had compared her business in China and United States: China| United States|
Mary Kay relies on sales promoters, who do not buy the company’s goods for resale, and sales directors to sell its products.| The sales force consists of beauty consultants and sales directors, all of whom are private entrepreneurs.| Chines sales promoters rarely visit customers’ homes. They set up appointment through referrals, hold classes in beauty centers and offices, promote products in the cities where they are licensed to do so.| Beauty consultant never visit customers’ homes| Sales director of China must possess an independent business license for cosmetics sales and consulting. Pass company’s examination and so on.| Sales director progress from the ranks of beauty consultants, sales directors in China come to the...
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