SLU Project Management Questions

I’m working on a business multi-part question and need the explanation and answer to help me learn.

A functional employee has demonstrated the necessary attributes of a potentially successful project manager.  Top management can:

a.  Promote the individual in salary and grade and transfer her into project management.

b.  Laterally transfer the employee into project management without any salary or grade increase.  If, after three to six months, the employee demonstrates that she can perform, she will receive an appropriate salary and grade increase.

c. Give the employee either a grade increase without any salary increase, or a small salary increase without any grade increase, under the stipulation that additional awards will be given at the end of the observation period, assuming that the employee can handle the position

If you were in top management, which method would you prefer?  If you dislike the above three choices, develop your own alternative.  What are the advantages and disadvantages of each choice?  For each choice, discuss the ramifications if the employee cannot handle the project management position.