Compensation means "making up for something." When a restaurant offers you a free dessert as compensation for messing up your dinner order, the hope is that you will leave happy (and refrain from writing a negative review online).

Compensation can also be money, a payment meant to give someone a fair exchange for their effort and output. In fact, the word comes from the Latin word compensat-, meaning "weighed against." If you receive fair compensation for your work, the money is equal to your time and effort. In other words, the scale is balanced.

Primary Meanings of compensation

the act of compensating for service, loss, or injury
(psychiatry) a defense mechanism that conceals your undesirable shortcomings by exaggerating desirable behaviors
Full Definitions of compensation

n the act of compensating for service, loss, or injury

an act of compensation for actual loss or damage or for trouble and annoyance
Type of:
correction, rectification
the act of offering an improvement to replace a mistake; setting right

n something (such as money) given or received as payment or reparation (as for a service or loss or injury)

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excessive compensation
workmen's compensation
compensation for death or injury suffered by a worker in the course of his employment
compensation paid (to someone) for damages or losses or money already spent etc.
compensation received by virtue of holding an office or having employment (usually in the form of wages or fees)
blood money
compensation paid to the family of a murdered person
amends, damages, indemnification, indemnity, redress, restitution
a sum of money paid in compensation for loss or injury
counterbalance, offset
a compensating equivalent
(usually plural) compensation exacted from a defeated nation by the victors
compensation (given or received) for an insult or injury
(law) redress awarded by a court
actual damages, compensatory damages, general damages
(law) compensation for losses that can readily be proven to have occurred and for which the injured party has the right to be compensated
nominal damages
(law) a trivial sum (usually $1.00) awarded as recognition that a legal injury was sustained (as for technical violations of a contract)
exemplary damages, punitive damages, smart money
(law) compensation in excess of actual damages (a form of punishment awarded in cases of malicious or willful misconduct)
atonement, expiation, satisfaction
compensation for a wrong
a sum granted as reimbursement for expenses
reimbursement for goods damaged while in transit or in use
pecuniary reimbursement to the winning party for the expenses of litigation
Type of:
payment or reward (as for service rendered)

n (psychiatry) a defense mechanism that conceals your undesirable shortcomings by exaggerating desirable behaviors

(psychiatry) an attempt to overcome a real or imagined defect or unwanted trait by overly exaggerating its opposite
Type of:
defence, defence mechanism, defence reaction, defense, defense mechanism, defense reaction
(psychiatry) an unconscious process that tries to reduce the anxiety associated with instinctive desires

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