A leading non-profit humanitarian relief and development organization working in 45 countries throughout the world, SC has been working in Indonesia since 1976. Our goal is to work with partners to assist vulnerable women and children to lead healthier and more productive lives. SC partners include the Department of Health, Education, Social Affairs and Women's Empowerment, as well as local NGOs, universities and professional associations.The mission of the organization to create lasting positive change in lives of children in need. SC is an apolitical and non religious organization and is proud to be independent and neutral in its dealings. SC activities in Indonesia are supported by a number of donors such as Gates Foundation, Oak Foundation, USAID, Herford Foundation, United Nation, private company and other individual donors.For implementation of programs, SCs human resource has to be professional and competent. However after the Tsunami that hit Aceh in December 2004, an influx of INGOs have made an entry into Indonesia making the demand for professional staff very high whereas the supply for such human resources are limited. This is the leading problem that SC faces.SC conducted and took part in a Salary Survey in 2003 to compare its salary levels with that of similar INGOs. In 2003, we found that SC is amongst the 75th Percentile. However, after the Tsunami did SC still hold that percentile? For this reason, the SC Management carried out a similar survey in 2005. Together with the survey, the management also decided to restructure the salary components.The revised salary components that were introduced were Annual Base Salary (monthly base salary x 12), Fixed Bonus (Festive Allowance), Non Cash Benefit (Hospitalization & Outpatient Benefits for Employee & Family, Life Insurance for Employee and Jamsostek) and employees working in Aceh after the Tsunami were given an Emergency Allowance (COLA 25%, Emergency Allowance 25%, Special Allowance between USS 50-200 depending on the level).Further to the above, to combat the problems faced by SC about limited manpower resources the following solutions have been provided by the writer:1. Incorporating a Variable Pay (VP) salary component that be given every 6 months and will be related to performance appraisal for the employees. Employees with high performance ratings (with the rank A, B and C) will be eligible only. For Example:- Rank A (100%) gets 1 months salary as VP- Rank B (50%) gets 0.5 months salary as VP- Rank C (25%) gets 0.25 months salary as VP2. Enhancement of Non Cash Incentives, like Recognition Awards, International Training Assignment, Long Service Awards and Flexi time.After analysis and observation of the nature and conditions of the organization and a study of the survey data the writer finds that the first solution of Variable Pay provided above is more attractive and competitive. If a variable pay incentive is introduced the organization does not need to change the existing salary ranges which is a cumbersome process and needs the approval of the HO based in the United States and the donors that provide SC with the funds for the programs.Hence to implement Variable Pay within the salary structure, the writer detailed out a plan of action which was accepted and sanctioned. The writer then socialized the entire organization about the concept of Variable Pay. Variable Pay was finally implemented within SC in June 2005.