These merit pay plans function very much like incentive plans. Similarly, it's sometimes difficult to tell the difference between incentive plans and earnings-at-risk. How far below the market must a company set its policy line before we say they have adopted an earnings-at-risk approach: 5 percent? 10 percent? 20 percent? And under what conditions do employees really feel that their pay is "at risk?" Lincoln Electric clearly work under an earnings-at-risk plan