Abstract: One aim of the personnel management reform in Chinese state-owned banking organizations is establishing a unique job grade system to replace the present executive and professional ones. Determining the number of grades and assigning them to job categories are two critical problems to the reform.Lack of job standards and job classification in present personnel management would make the solution of these problems difficult if popular job evaluation methods were applied. Variance Analysis Method (VAM)of job evaluation developed by the first author is selected to solve the problems.The procedure is as follows.1) Job analysis.The Position Analysis Questionnaire(PAQ)is selected to obtain the descriptive data of positions by interviewing job incumbents individually,2) Job classification,Ward's hierarchical clustering method is selected to cluster positions and to generalize job characteristics based on the descriptive data.3) Evaluating jobs,F statistic of a comparable worth component is converted as the weight of the component.Job value is the linear combination of all the components.4) Calculating variety intervals of job cluster values, 95%confidence interval of each cluster values is determined as the variety interval.5)Determining grade numbers and assigning them to job categories.Job clusters are merged into several categories according to organizational hierarchies.A category interval is the merged intervals of those included clusters.A divisor is sought for dividing all category intervals with the fewest discrepancies. Grades are then determined and assigned to job categories.This procedure was applied in one banking organization,841 samples of 452 jobs were evaluated. 31 job clusters were determined then merged into 6 categories with the assistance of banking personnel experience.16 job grades were determined and assigned to job categories, The effectiveness and applicability of the VAM for determining job grades was substantiated by the results.

Key words: variance analysis method of job evaluation, job grades, banking personnel