Mary Kay Cosmetics Case
MPO Strengths
* Consultants are financially rewarded only if they increase sales and recruiting. The strong link between performance and outcomes (strong P-to-O instrumentality in Expectancy Theory) leads to high employee motivation.
* Mary Kay 's automobile reward program is highly valued by employees (high outcome valences in Expectancy Theory) and has spurred many consultants to perform at very high levels. Automobile reward is contingent on the meeting of minimum monthly sales targets.
* Consultants ' need for belonging and esteem (Need Hierarchy Theory) is cost effectively leveraged by the various recognition programs.
* Mary Kay Cosmetics has training systems to improve performance (improve E-P in Expectancy theory). Consultants have access to training manuals, weekly meetings, sponsored conferences, a hot-line, and other on-going support.
* Opportunities for advancement and achievement are clear and transparent allowing consultants to pursue their growth and development needs (motivators in the Motivator-Hygiene model).
* Consultants have high autonomy and flexibility. They are essentially independent franchisees. As independent sales people, they have immediate feedback on their own performance.
MPO Problems
* VIP consultants work extra hard to become directors, but are often too ill-prepared, inexperienced, and lacking in team strength to meet the demands of continuing director level performance (weakening E-P in Expectancy Theory). The jump to director level may be too challenging (Goal Theory), but director level learning supports may be inadequate (Social Learning Theory). Failure follows, self-efficacy is damaged, and so is the director 's unit morale. ERG Theory suggests that satisfaction-progression may be replaced by frustration-regression.
* Many consultants have stagnated at a "maintenance" sales level as they become satisfied with retaining their VIP cars. Inadequate incentives exist for these consultants to go beyond this maintenance
* Consultants are financially rewarded only if they increase sales and recruiting. The strong link between performance and outcomes (strong P-to-O instrumentality in Expectancy Theory) leads to high employee motivation.
* Mary Kay 's automobile reward program is highly valued by employees (high outcome valences in Expectancy Theory) and has spurred many consultants to perform at very high levels. Automobile reward is contingent on the meeting of minimum monthly sales targets.
* Consultants ' need for belonging and esteem (Need Hierarchy Theory) is cost effectively leveraged by the various recognition programs.
* Mary Kay Cosmetics has training systems to improve performance (improve E-P in Expectancy theory). Consultants have access to training manuals, weekly meetings, sponsored conferences, a hot-line, and other on-going support.
* Opportunities for advancement and achievement are clear and transparent allowing consultants to pursue their growth and development needs (motivators in the Motivator-Hygiene model).
* Consultants have high autonomy and flexibility. They are essentially independent franchisees. As independent sales people, they have immediate feedback on their own performance.
MPO Problems
* VIP consultants work extra hard to become directors, but are often too ill-prepared, inexperienced, and lacking in team strength to meet the demands of continuing director level performance (weakening E-P in Expectancy Theory). The jump to director level may be too challenging (Goal Theory), but director level learning supports may be inadequate (Social Learning Theory). Failure follows, self-efficacy is damaged, and so is the director 's unit morale. ERG Theory suggests that satisfaction-progression may be replaced by frustration-regression.
* Many consultants have stagnated at a "maintenance" sales level as they become satisfied with retaining their VIP cars. Inadequate incentives exist for these consultants to go beyond this maintenance
References: Dickson, D., & Saunders, C., & Stringer, M. (1993). Rewarding People: The Skill of Responding Positively. New York: Routledge. Flaherty, C. F. (1996). Incentive Relativity. Cambridge: Cambridge University Press. Kohn, A. (1993). Punished by rewards: The trouble with gold stars, incentive plans, A 's, praise, and other bribes. New York: Houghton Mifflin Company. Matsumoto, R. T. (1969). Relative reward effects in differential conditioning. Journal of Comparative and Physiological Psychology, 68, 589-92. Stock, C. (1978). Effects of praise and its source on performance. Perceptual and Motor Skill, 47, 43-46. Weiner, B., & Kukla, A. (1970). An attrubutional anlysis of achievenment motivation. Journal of Personality and Social Psychology, 15, 1-20. Woodside, A.G., & Davenport, J.W. (1974). The effect of salesman similarity and expertise on consumer purchasing. Journal of Marketing Research, 11, 198-202.