This document outlines various aspects of financial performance appraisal, including preparation tips, methods, and the importance of having a future-focused outlook during appraisals. It discusses different appraisal methods such as ranking, rating scales, checklist, critical incidents, essay, and behaviorally anchored rating scales, along with their advantages and disadvantages. Overall, the document emphasizes the need for factual discussions in appraisals to effectively communicate value and career goals.

1. Financial performance appraisal
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I. Contents of getting financial performance appraisal
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Many people view performance appraisals as a stressful experience. Others embrace them as an
opportunity to discuss their performance and highlight the value they have added to the business
over the previous year. Appraisals also provide a great opportunity to discuss your future plans
and potential opportunities for personal growth and development in the coming year.
Prepare for your appraisal
If you are well prepared for your appraisal you will feel more confident. Therefore, you should
ensure that you have carefully prepared examples of your work and performance and collated all
the facts before the meeting. Use this opportunity to discuss any reports you have made that have
supported senior management or to highlight your performance during quarterly and yearly
forecasting. Be prepared to take some constructive criticism as well. Appraisals can be make-or-
break moments in your career and as such it is vital to prepare for them as you would an exam or
interview.
What do you want to achieve?
Think about what you want to achieve in your career over the next few years and how your
current employer can help you accomplish your goals. Ensure you take the time to think about
possible training options, additional industry qualifications, how you can gain different
experience to broaden your skill base, and things that will help your career in the long term. In
order to achieve career progression, it is important to maintain a future-focused outlook.

2. If you have ideas on improving the role, the team, or a specific process within the finance
department, then this is your opportunity to share your feedback or suggestions. You should use
your meeting as a chance to express your interest in taking on extra responsibility – this is a sure
way of getting ahead, being noticed and showcasing your commitment to the company.
Be factual
Above all, remember that a performance appraisal is a business discussion. Avoid emotive
language and responses to any constructive feedback you may receive. Focus on factual reasons
why you should be considered for a pay rise or a promotion, not just because somebody else
received one. Your performance appraisal is the best opportunity to convince your employer of
the value you have contributed to the business and how you can continue to contribute in the
future.
Anything that is discussed in an appraisal should not come as a surprise to either party. Do not
store up grievances until an appraisal – these should be discussed as and when they happen. This
is, however, a good time to re-iterate any issues that occurred throughout the course of the year.
Performance appraisals should be a positive experience and an opportunity for you to
communicate honestly with your manager about your career progression. You should always
take a positive and energetic approach to your appraisal. Take ownership of the process and the
rewards will follow.
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III. Performance appraisal methods
1.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
i. Employees are ranked according to their performance
levels.

3. ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
i. The “whole man” is compared with another “whole man”
in this method. In practice, it is very difficult to compare
individuals possessing various individual traits.
ii. This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
iii. When a large number of employees are working, ranking
of individuals become a difficult issue.
iv. There is no systematic procedure for ranking individuals
in the organization. The ranking system does not eliminate
the possibility of snap judgements.
2. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages – Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages – Rater’s biases
3. Checklist method

4. Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages – economy, ease of administration, limited
training required, standardization. Disadvantages – Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings
4. Critical Incidents Method
The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages – Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages – Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.
5. Essay Method

5. In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage – It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.
6. Behaviorally Anchored Rating Scales
statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions
inherent in most rating techniques.
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