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On-call pay

Setting up a policy for paying on-call teams

Providing customers with a seamless experience means ensuring you have the right people on call and available to respond to an incident, should one arise. Since on call is a stressful job and usually demands work outside of typical business hours, it’s important to design and document an on-call compensation plan, both to keep your systems up and running—and so your on-call employees feel valued.

On-call employees are typically compensated for the time they spend being ready and available to work.

Compensation models for on call pay vary, and can involve pay in addition to regular salary, extra time off, or some combination of the two.

The key to choosing the best on-call compensation plan is finding a solution that ensures your company has the coverage it needs in the event of an incident, but also recognizes your employees for their effort and time spent. If employees feel like their time is valued and respected, they will, in turn, care about the business and contribute to its success. 

There are a lot of considerations that go into implementing an on-call compensation plan: 

  • Will compensation be made with extra pay or extra time
  • How often and for how long each person will be on call
  • What type of work is expected during each shift
  • Any additional incentives for tackling difficult or extra time-consuming incidents

What’s most important is that you formalize a compensation plan and follow it consistently. Without this, your on-call team can feel overburdened and undervalued.

How to construct an effective on call pay model for IT Ops and DevOps Teams

Types of on call compensation models

The documented on call policy you choose should be detailed and explicit so employees know what they’re signing up for and you can manage expectations. Your documentation should cover: 

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

1. Incentivized on call

An incentivized on-call compensation model rewards employees who work on-call hours in exchange for extra days off, flexible hours, higher base salaries, or some combination of these things. Giving ample time off also gives employees a chance to recharge after long hours and lets them know their work is valued.

2. Paid on call for scheduled overtime

This on-call compensation model means employees are paid for the time they spend on call, even if no issues arise during their shift. Employees who agree to be available at a moment’s notice can find it easier to justify the obligation of being on call and available, even if no issues arise.

3. Paid on call for the time spent on the issues

Another model for on call compensation is paying employees only when they work on an incident. One possible risk is that there could be a financial disincentive to reducing alerts and issues, which could have a negative impact on the overall integrity of your systems.

4. Paid on call for scheduled overtime and time spent on the issues

One other approach to on-call pay is to compensate employees for their on call shift and an additional amount for the number of issues worked. In this model, employees can feel well-compensated for the additional time that the company asks of them. And in the event that someone gets stuck with a particularly difficult issue they’re compensated for the loss of their personal time.

Extra on-call Compensation Incentives

Once you decide on the type of on call compensation model that will work for your organization, your next step is to determine if and how you’ll add further compensation incentives. Here are some options (note that not all of these will work for the models above). 

1. Number of alerts received on and off-hours

You can further compensate on-call employees by the number of alerts they receive on- and off-hours, adding additional compensation for working after business hours.

2. Time spent working on the incidents

The complexity and importance of incidents can vary. One on-call employee may spend an entire night working on an incident, while others may only spend a few minutes. Consider if you want to add bonus compensation for working especially difficult incidents.

3. Mean time to acknowledge or resolve (MTTA/MTTR)

Enforced by escalation policies, time to acknowledge is critical for fast resolution. Measuring the mean time to acknowledge (MTTA) and mean time to resolve (MTTR) can help you determine if you want to add special on-call compensation for quick response times.

On call employee compensation rights

A lot of things can go wrong if you don’t have a fair on call compensation plan. If employees are expected to work extra hours on top of their normal jobs at a moment’s notice under the high pressure of an incident—without extra compensation—they’re likely to grow resentful and suffer from burnout. 

And if your on-call model doesn’t explicitly state when an employee is expected to be available, and your on-call compensation plan isn’t formal and communicated, you’re risking extra tension and confusion within your team. 

If you don’t have a plan that’s considered and formalized, you’re effectively asking employees to work for free. You may find that fewer employees are willing to work on call, leaving others to do more on call shifts than is fair, leading to burnout and lower retention. 

Depending on your location, there may be specific laws that will determine which on call compensation model you can choose for your organization. Be sure to consult an attorney and investigate federal guidelines before you formalize your on call compensation plan.

On call compensation policies and requirements

Every company needs fair and consistent on-call pay policies. When employees feel that they’re fairly compensated for their time they’re less likely to experience burnout, and you’re more likely to build a healthy, sustainable work culture. 

You company’s on-call compensation policies should be clearly spelled out and documented wherever you communicate your other policies, such as an employee handbook. The policy should be explained to employees who will have on-call duties, ideally, as part of the interview process before they join the company.

The type of plan you implement will be determined by the size of your company, the type and severity of incidents your team typically faces, and your company culture around rewarding and recognizing employees.

When choosing an on call pay model for your company or team, always confirm that the models you’re considering follows local labor laws and that proper documentation is provided to employees.

Conclusion

A well-considered and documented on call compensation plan is critical for keeping your team engaged, motivated, and focused on keeping your systems up and running, meeting your SLAs and customer expectations. When employees feel that their time is valued and they’re compensated for both the time and attention they give their jobs—especially when encroaches on their personal life—you’ll reduce burnout and increase employee retention.