In Workday, when updating allowance plan target amounts, administrators must carefully manage how the change impacts employees who are assigned override amounts. Overrides represent intentional deviations from the plan default, and preserving those differences is often a business requirement.

The Set Up Allowance Plan Adjustment task provides specific options for handling overrides. The option Adjust by Same Amounts for Employees Using Override increases each employee's allowance by the same delta as the change to the plan default. In this scenario, the default increases from $150 to $200, a difference of $50. Employees with override amounts will also receive a $50 increase, thereby preserving their original variance from the default.

Selecting Adjust to New Defaults would eliminate the override difference by resetting employees to the new default amount, which contradicts the requirement. Removing or re-rolling out the plan introduces unnecessary disruption and risk.

Therefore, the correct approach is to use the Set Up Allowance Plan Adjustment task and select Adjust by Same Amounts for Employees Using Override, making option D correct.