Abstract: This approach is based on the postulation that the large variance of comparable job worth component leads to large contribution to pay differentials.The evaluation procedure was as follows:1)Job description by incumbents; 2)principal component analysis on the job description data; 3)job classification by hierarchical cluster analysis based on Ward's method 4)as the critical step,weight assessment for job comparable worth components by using variance analysis to generate evaluation points. A weight is to be greater than or equal to 0.These weights are to be compared directly with each other.The sum of weights is to be 1. And most important, the size of a weight is to match with the variance of the relative component; and 5)transformation from job evaluated points into pay rates. A constant c and an adjusting coefficient a in the transformation are estimated to fit the conditions of an organization.A total of 571 samples from 524 jobs in 2 organizations were evaluated with this approach.The results proved this approach effective and applicable.

Key words: Job evaluation, Variance analysis approach, Comparable worth, Compensation system, Pay rates