 In continuation of the incentive design system and there is another issue arises that how to align pay with the managerial performance total shareholder return as a performance mayor is a subjective performance mayor and a subjective performance mayor is required to be treated subjectively. But in subjective performance management system, there is a problem that employees generally do not trust their supervisors regarding appropriate and accurate performance evaluation. On the other hand, in objective performance management system, there is also a drawback that objectively the output or performance of an individual cannot be quantified due to certain issues like joint production and unobservability found among the different employees. There are certain criticism that an objective system carries. The first is that if there is any mis-specification in the performance mayor system, then that mis-specification can easily be gained by the employer or group of employees in their own interest. The second criticism is that once an objective system is designed, it cannot be changed frequently because if there is any subsequent change required, it may be a deterrent to the employee or any employee in the group. The third one is that there would be a threat among the employees that if any employee goes beyond the expectations for higher performance, then the benchmark bar may be set upward. Also in order to avoid that threat, employee tries to restrict his or her output so that he can reap the alerted bonus through his act. The solution to this problem is that there should be a linear relationship between pay and performance and this linear relationship can encourage employees for a persistent value creation at their part. On the screen, you can see a graph on the x-axis there is a performance mayor and on the y-axis there is a compensation package. You see that the compensation package is divided into two halves. The first or lower bond is the salary and the upper bond is the bonus. If we see at point A, let's assume that it is the year end and the manager has to decide on some risky project. Now the point A states that the manager is earning only the salary. So if he does not go for the risky project, there would be no decline in his salary package. Or even if the manager goes for the risky project and in case of loss, there would be no negative effect on its salary. But if we see the point B, we see that let there is an early period in the year and the manager has to decide on some risky project. At this point, the manager is compensated in two forms. The first is salary and the second is the bonus. So the manager is at the upper bond. Now if the manager takes on some risky project and the result is the loss on that risky project, the manager has to lose much on the downside. But in case of profitability on the risky project, the manager is lesser or nothing at the upper bound. So we see that linear relationship between the pay and promise of the employee is an appropriate solution for the alignment between pay and the performance.