The photoelectric effect refers to the emission of electrons when electromagnetic radiation is incident on a metal surface. In an electric circuit consisting of a photocell, when electromagnetic radiation, such as ultraviolet rays is incident on a photocell, an electric current flows and the current is called photocurrent.
The Compton effect, on the other hand, is the scattering of photons from gamma or X rays by the electrons orbiting around the atoms. When a primary photon collides with an electron, some of the energy of the photon is transferred to the electron, which is then ejected from the atom. Another photon that is of lesser energy, then moves off at an angle to the direction of motion of the primary photon.
Discovery of the photoelectric effect phenomenon was by German physicist Heinrich Hertz in 1887. It was by accident that he discover it the phenomenon by accident while conducting some of his monumental studies on the electromagnetic wave. He noticed that the gap between a pair of oppositely charged electrodes broke down, or sparked, quite readily when a second spark gap was fired in the immediate neighborhood. This verified that electromagnetic waves of wavelength shorter than those of visible light was irradiating the first gap and causing it to break down. The discovery, upon further investigation, caused a major upset on the prevailing hypothesis that light is a wave and gave rise to the theory that light exists as a particle and wave.
In contrast, the Compton effect, was discovered by American physicist Arthur Holly Compton, in 1923. He observed that X-rays scattered in paraffin have a longer wavelength than that of incident rays. The shift in wavelength could not be explained by classical theory, which stated that under the influence of the periodic electric field of an electromagnetic wave, an electron should oscillate with a frequency equal to that of the wave and consequently should radiate secondary (scattered) waves of the same frequency. It provided verification to quantum mechanics hypothesis that electromagnetic radiation came in discrete photons with energy proportional to frequency.
The photoelectric effect demonstrated the result when a photon gives up all its energy after interaction with an electron while the Compton effect showed that the consequence after a photon gives up some of its energy after interaction with an electron. Fundamentally, in the Compton effect, a photon is elastically scattered by a charge which recoils due to conservation of energy and momentum whereas in the photoelectric effect, a photon is completely absorbed by a solid and an electron is ejected in the process. As such, the frequency of the scattered photon is considered in the Compton effect while it is not considered in the photoelectric effect
These two effects are in reality the same, as they can be attributed to the quantum mechanics fact of wave-particle duality.