The Collaborative International Dictionary of English v.0.48:

overcompensate \overcompensate\ v.
   to make excessive corrections for fear of making an error.

   Syn: over-correct, compensate too much.
        [WordNet 1.5]

WordNet (r) 3.0 (2006):

overcompensate
    v 1: make up for shortcomings or a feeling of inferiority by
         exaggerating good qualities; "he is compensating for being
         a bad father" [syn: cover, compensate,
         overcompensate]
    2: make excessive corrections for fear of making an error [syn:
       over-correct, overcompensate]