What is meant by compensation in transistor?

Temperature (assumed) compensation in a transistor is when you limit gain using resistors so that gain is dependent on resistor ratio instead of on hFe As an example, in a common emitter, class A, configuration, with the emitter grounded, the gain is hFe. Problem is that hFe varies from device to device, and it is temperature sensistive, having a positive temperature coefficient, making thermal runaway a very real problem You can compensate for this with an emitter resistor. In combination with the collector resistor, gain is collector resistance divided by emitter resistance, or hFe, whichever is less.

If you make sure that hFe is always greater than this ratio, then the gain will be stable and predictable.

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