Mary Key

Q1

Mary Key Cosmetics use a mix of monetary and non-monetary rewards. Because in the Corporate Culture consultants are the most important strength, MKC management board stated that their goal is to support the independent sales force, because all members of the company is their lifeblood. To motivate consultants they use a mixed set of monetary and non-monetary rewards.

a.

Use of Monetary rewards in Mary Kay Cosmetics depends of the :

- sale results of each vendor,

- recruitment results,

- status in organization.

Each consultant gets the pay off for the sale results. Recruiters up to VIPs receive in addition 4 – 12% commission on personal recruits’ production. Directors, despite mentioned gratifications revive 9 – 13% Directors unit commission on total unit production and production bonus. Senior Directors receives 4 or 5% commission on wholesale production of off-spring units additionally. National Sales Directors despite all mentioned above receive 5-8% commission on wholesale production of first-line off-spring units, 2% commission on wholesale production of second-line off-spring units and ½% commission on wholesale production of first-line units of second-line directors who became National Directors.

b.

Non-monetary rewards in Mary Kay Cosmetics:

• Rewards given at corporate meetings

o Ribbons, pins, Queen’s crown

 Given in front of thousands of consultants during ceremony

 Gives a kind of hope for being recognized („maybe me next time”)

 Annual event

 No material value

 Effected as successful utilization

 Motivation of wide groups and individuals

o Furs; Jewelry; Trips

 Given in front of thousands of consultants during ceremony

 Material value

 Recognition

 Effected as successful utilization

 Motivation of individuals

 Motivation of groups (to some extent)

• Rewards given at team meetings

o Small low-value rewards (pens, imitation of pearls etc.)

 Given among other members of the team

 Often

 Low material value

 Big “recognition value”

 Keeps consultants in the sales team

 Effected as successful utilization

 Motivation of small groups and individuals

• Other

o Three car programs

 Effected as a mix of success and failure:

• Motivates to achieve better results (before winning a car)

• Doesn’t motivate to overachievements afterwards

 Reason:

• Very “high” value (not aligned with other rewards)

• “Nothing beyond this point”

• Too long period (“sliding window issue” – incurs costs for M.K.)

Q2

Mary Kay Cosmetics corporate culture was stated by mission and passion of its founder Mary Key Ash. The independent sales force of consultants was the foundation of its culture. Mary Key Ash and her female staff wanted to change the world and show to all women how important they are and how beautiful they can be. It was the basement to the set of corporate culture statements and motivation systems.

According to the culture, motivation system generally accents four non-financial values: satisfaction, teamwork, opportunity and recognition. It reinforces the reward system by building it on non-financial rewards, which clearly meets the needs of typical consultant and indicates its status and the position within the structure of the corporation. The fifth value are financial rewards – money.

The company set of values was referred to STORM and applicable incentives were attached to each need.

Satisfaction Teamwork Opportunity Recognition Money

satisfaction with task well done – array of prizes for incremental progress A sense of belonging; the independent consultants personally chose their own new recruits. The majority of a consultant’s interaction is with her unit director and other consultants in her unit

advancement, success achievement prizes, congratulatory applause at meetings, results publishing in MKC journal; directors can also award their consultants on their own financial rewards:

the incentives are distributed heavily on the basis of the sales force’s performance incl. recruiting ability and sales of products. The higher the level the consultant