This doctoral thesis attempts to show the impact of military education and compensation on the effectiveness of human resources in military organization. Accordingly, the research looks into the connection between military education and the compensation, as well as the impact of military education on the effectiveness of human resources in the military organization, and examines the impact of compensation on human resource effectiveness through increased motivation, higher engagement, and reduced turnover. Evaluation of the set hypotheses was carried out by qualitative and quantitative research. The scientific contribution of the conducted research is displayed through linking compensation with the phenomenon of employee turnover, motivation and engagement in a military organization. Additionally, the contribution is also demonstrated with the development of a compensation model which represents the modernization of compensation in a military organization with the purpose of improving the effectiveness of human resources as a medium of executing military tasks. Another important merit of this research is derived from relating military education as a segment of professional military development with the phenomenon of employee turnover, motivation and engagement in a military organization. Due to the fact that no research on the effectiveness of human resources on the role of compensation has been done thus far, neither in the Republic of Croatia, nor in the world, this paper can serve as a guideline to the military management of the Republic of Croatia regarding the possibilities of applying latest aspects of incentive compensation in military organization.