If Entrepreneurs buy into the concept of Pay for Performance (P4P), then setting payouts under the program become important.

While establishing the payout levels for a P4P Program, three factors need to be taken into account - expected performance level, level of difficulty, and likelihood of achievement.

Based these factors, one can set up a matrix to develop different payout levels. For example, for a level of performance at 75%, with a level of difficulty of 80% and likelihood of achievement of 85%, the payout level could be 70% of target P4P bonus.