Section K: Performance Pay Plans In this section, you need to take each of the performance pay plans that you are recommending and describe the key characteristics of each, as they will be applied at your client firm. For example, if you have a profit-sharing plan, who will be eligible, what proportion of profits will be allocated to the plan, what will be the form of the payout (e.g., current or deferred; cash or stock), how often will it pay out, and how will it be allocated across eligible employees are just some of the questions you need to address. In so doing, you always need to provide your underlying rationale for your choices. Also, discuss the possible advantages the plan may produce and the possible disadvantages that may arise. Chapter 11 identifies the key issues in designing the main types of performance pay plans. But don't forget that if you have a merit pay plan that depends on appraised employee performance (as most teams will have as part of their movement through the pay range policy developed in Phase II), then you need to develop a performance appraisal system, as described in Chapter 10.