Compensation refers to something, typically money, awarded to someone in recognition of loss, suffering, or injury.
In business context, compensation means all forms of financial returns and tangible benefits that employees receive as part of an employment relationship.
The term "compensation" also refers to:
1. The act of compensating or state of being compensated
2. Psychology: the process of making up for a real or imagined deficiency
3. Engineering: the counterbalancing of any defect or error