TheSet Up Allowance Plan Adjustmenttask is specifically designed to update allowance plan amounts forexisting employee assignmentswhen plan targets change. Simply editing the allowance plan amount ensuresnew employeesreceive the updated value, but it doesnot automatically update existing employeesalready assigned to the plan.

By running the Allowance Plan Adjustment task and selectingAdjust to New Defaults, Workday evaluates all employees assigned to the plan and updates their allowance amounts to match the new default value of $3,500.

Manually updating employees through Request Compensation Change is inefficient and error-prone. Creating a new plan introduces unnecessary complexity and disrupts reporting continuity.

Therefore, the correct and Workday-recommended approach is to runSet Up Allowance Plan Adjustmentand adjust to new defaults, making optionDcorrect.