Abstract: This paper establishes the dynamic models of performance and compensation on basis of the theory of system dynamics.Furthermore，it presents three typical conceptual models of performance and compensation relationship：passive model，inefficient model and positive model. Analysis of these models leads to the conclusion that enterprises develop well when under a stable performance and compensation relationship.But long-term development of enterprises must be based on making and implementation of regulations according to positive model of performance and compensation relationship which keeps enterprises alive and powerful in sharp competitions.

Key words: performance and compensation, dynamic model, passive model, inefficient model, positive model