Mary Kay Cosmetics: Sales Force Incentives (A)

Robert L. Simons; Hilary  Weston

Case | HBS Case Collection | March 1990 (Revised October 1999)

Mary Kay Cosmetics: Sales Force Incentives (A)

Abstract

Describes the incentive system by which Mary Kay Cosmetics motivates the sales force of 200,000 independent agents who comprise the firm's only distribution channel. Illustrates the powerful effect on sales-force behavior that results when creative types of employee recognition are combined with financial incentives. Focuses on the challenges that managers face when they try to reduce program costs by modifying the VIP automobile program that awards the use of pink Cadillacs and other cars to successful sales agents. A detailed description of the parameters and formulas that drive the recognition and reward programs is provided.

Keywords: Motivation and Incentives; Cost Management; Salesforce Management; Distribution Channels; Beauty and Cosmetics Industry; United States;

Format: Print

16 pages

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Citation:

Simons, Robert L., and Hilary Weston. "Mary Kay Cosmetics: Sales Force Incentives (A)." Harvard Business School Case 190-103, March 1990. (Revised October 1999.)

Illustrates the management control challenges that are associated with rapid growth and geographic expansion. Situated at an offsite Executive Committee Retreat. The three founding partners of a specialized consulting firm are grappling with several difficult questions and problems: 1) the tension between local office autonomy, entrepreneurship, and the need for a unified firm strategy; 2) the increasing need for standardized ways to monitor rising costs, capacity utilization, and new business development; 3) redefining the role of the Executive Committee and the role of formal systems as the partnership continues to grow.

Module Note | November 2016 (Revised March 2018)

Strategy Execution Module 9: Building a Balanced Scorecard

Robert Simons

This module reading explains how to construct a strategy map and build a balanced scorecard. Using an internal value chain model, the module illustrates how a balanced scorecard can support and enable customer management, innovation, operations, and post-sale service processes. The analysis provides details on how to design performance indicators to monitor financial goals, customer goals, internal process goals, and learning and growth goals. The module discusses how these measures provide a comprehensive set of tools for monitoring strategy execution. The module concludes by discussing how to assign accountability for balanced scorecard measures to individual managers to ensure focus and alignment throughout the organization. While this module is designed to be used alone, it is part of the Strategy Execution series. Taken together, the series forms a complete course that teaches the latest techniques for using performance measurement and control systems to implement strategy. Modules 1 - 4 set out the foundations for strategy implementation. Modules 5 - 10 teach quantitative tools for performance measurement and control. Modules 11 - 15 illustrate the use of these techniques by managers to achieve profit goals and strategies.

Keywords: Management Control Systems; Implementing strategy; strategy; Execution; balanced scorecard; performance measurement; Strategy map; Business goals; business model; Customer measures; Strategy; Balanced Scorecard; Business Model;

Citation:

Simons, Robert. "Strategy Execution Module 9: Building a Balanced Scorecard." Harvard Business School Module Note 117-109, November 2016. (Revised March 2018.) View Details

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Mary Kay Cosmetics: Sales Force Incentives (A)

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