compensation (n.)

late 14c., "action of compensating," from Latin compensationem (nominative compensatio) "a weighing one thing against another, a balancing," noun of action from past participle stem of compensare "to weigh one thing (against another)," thus, "to counterbalance," from com "with, together" (see com-) + pensare, frequentative of pendere "to hang, cause to hang; weigh; pay" (from PIE root *(s)pen-"to draw, stretch, spin").

Meaning "what is given in recompense" is from c. 1600; meaning "amends for loss or damages" is from 1804; meaning "salary, wages" is attested from 1787, American English. The psychological sense is from 1914.