Why do some people earn more than others for similar effort? Why does generosity so often come back? The law of compensation offers one explanation: you receive in proportion to what you give.
In this guide, you'll learn what the law of compensation is, where it comes from, how it applies to money and success, and how to use it in your daily life.
What Is the Law of Compensation?
The law of compensation states that you're rewarded in proportion to the value you give: the more value, service and effort you contribute, the more you receive in return, in money, opportunities, relationships or fulfilment. It's one of the 12 universal laws and is closely related to the law of cause and effect. The idea was famously explored by Ralph Waldo Emerson in his 1841 essay "Compensation", which argued that every action has its natural consequence and that life tends to balance what we give and receive.Key Principles of the Law of Compensation
The law of compensation is based on a few simple principles about giving and receiving. Here's how it works. Keep these ideas in mind when you read the examples below.- What you give comes back. Kindness, effort and value return to you, though not always from the same source.
- Rewards follow value. Your income often reflects the value you provide and how difficult you are to replace.
- Compensation isn't always immediate. Some rewards take time to arrive.
- Compensation isn't only money. It can be respect, growth, health, love or peace of mind.
The Law of Compensation and Money
Earl Nightingale and other success teachers often summarised it like this: the amount of money you earn reflects the need for what you do, your ability to do it and how difficult you are to replace. To increase your income, increase the value you offer. Ways to apply this:- Develop rare, valuable skills.
- Solve bigger problems for more people.
- Do more than you're paid for. Napoleon Hill called this "going the extra mile".
- Package your value so it reaches more people, such as a product, a course or a business.
Examples of the Law of Compensation
These everyday examples show the law of compensation in action at work, in friendships and in business. You'll probably recognise some from your own life. They show that rewards often arrive later and in unexpected forms.- An employee who consistently goes beyond their role is the one who gets promoted.
- A friend who's always supportive finds people support them in hard times.
- A business that treats customers generously earns loyalty and referrals.
- Someone who invests in learning sees the payoff years later.