An operation unit of a PMD compensation module includes a PBS (polarization beam splitter), a compensating part and a combiner. The PBS separates an optical input into a first polarized signal and a second polarized signal. The compensating part includes a fixed prism and a movable prism. The first polarized signal outputted from the PBS travels through the fixed prism and the movable prism in series. The light path of the first polarized signal in the movable prism is elongated or shortened according to a position of the movable prism. A continuously variable delay can thus be applied between the first and second polarized signals. The combiner recombines the first polarized signal received from the compensating part and the second polarized signal received from the PBS into an optical output signal.