Four Typical On-Call Compensation Models

determining-fair-on-call-blog-header-imageThis is an excerpt from our latest white paper,  Setting Expectations and Fair Compensation for On-Call Teamsin which we describe the ways Opsgenie assists in tracking on-call time to provide compensation regardless of the approach chosen.

On-call compensation models may vary based on local laws, company culture, and management practices. Some common compensation models include:

1 - Incentivized on-call

2 - Paid for scheduled overtime

3 - Paid for total time spent resolving issues

4 - Paid for both scheduled overtime as well as total time spent resolving issues

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When choosing an on-call model for your company or team, always confirm that the models being evaluated follow local labor laws and that proper documentation is provided to employees. The documented policy should be explicit, this way employees know what they’re signing up for and employers can manage expectations. Documentation should cover:

  • Method of compensation (monetary incentives, added time off, etc)
  • Hour flexibility (if any)
  • Pseudo privileges
  • SLAs/SLOs for on-call
  • Number of on-call hours/shifts required

 

Incentivized on-call

Incentivized on-call compensates employees for on-call hours via extra days off, flexible hours, higher salaries overall, and/or additional incentives.

As a real-life example, Hosted Graphite’s co-founder Charlie von Metzradt states that: in addition to higher salaries for SREs, they also offer additional days off. The week following the on-call shift, an additional day off is granted to the employee regardless of alerts received or issues worked. 

The advantage of using an incentivized on-call model is an increase in ownership over projects and services. Increased ownership builds resilient systems and can reduce alert volume if responsibilities are properly shared between service owners and developers.

Giving ample time off and paying competitively also lets the employee know their work is valued and appreciated. Providing a fair and competitive salary as part of incentivized on-call can be successful because employees are both provided for and measured by the success of the services they own in return.

 

Paid on-call for scheduled overtime

Paid on-call simply means that employees are directly compensated for the time they spend on-call or are scheduled to work—even if no issues arise during the shift. 

The obvious advantage of this model is the tangible incentive. Knowing that you are getting paid for carrying a pager (or in most cases a laptop and cell phone) makes it easier to justify being on-call and being available o-hours, even if no issues arise.

 

Paid on-call for the time spent on the issues

Paying only when an alert is received is another model with different advantages. This model compensates in different ways, for example, such as:

  • Bulk amount paid for working on call
  • Hourly rate for time spent working on alerts/issues
  • Rate for number of alerts/issues worked

The positive of this model is that employees are still being appreciated and compensated for the extra work put in during off-hours. A drawback is that a financial incentive for alerts worked may discourage fixing alerts quickly or avoiding them all together.

 

Paid on-call for scheduled overtime and time spent on the issues

This is a combination of the two previous models. Some companies pay both for being on-call and an additional amount for alerts received/issues worked. The positive is that the employee feels well compensated for the extra time and effort that on-call requires—which makes it feel like less of a chore. Additionally, if you’re stuck working on issues that take a while to resolve or occur at times that disrupt your life, the extra compensation for that time is a positive. The only drawback is that it may discourage resilient systems because compensation is based on time spent on issues or the number of alerts/issues worked.