How to Improve Your Financial Management Abilities Even When your Colleagues Agree with your Self Rating on a 360-Degree Assessment Report

Financial management is critical to improve regardless of whether or not you manage a budget

Garrett Mintz , Mon 1 February 2021
A 360-degree assessment is a unique survey that uses input from self-assessment and from colleagues’ assessments to understand a professional’s strengths, weaknesses, and blind spots. By gathering feedback from your colleagues alongside your own perspective on those same questions, we can get a deeper look at how your self-perception compares to the way your colleagues see you. 

With this data, we can break down the results of a 360-Degree Assessment into three outcomes: 

1) Somebody has underestimated their abilities (self-rating lower than colleagues’ ratings), 

2) Somebody has overestimated their abilities (self-rating higher than colleagues’), 
 3) Somebody is self-aware about their abilities (self-rating matches colleagues’).

This article is going to address some possible problems and solutions that might arise for people who are self-aware of their abilities. This article is part of a series I’m writing about Ambition In Motion’s 360-Degree Assessments and how their results should be interpreted. There are ten other articles addressing the two other possible outcomes of a 360-Degree Assessment available here:

Overestimating - People Management, Innovation, Leadership Ability, Communication Skills, and Financial Management 

Understanding Self-Awareness for 360-Degree Assessments

When somebody is self-aware about their abilities, this means that they gave themselves a similar score as the score their colleagues provided on the same skill. 

Initially, self-awareness may seem to be a cut-and-dry positive outcome but looking a bit deeper reveals some potential issues. After all, the goal of a 360-degree assessment is to identify blind spots and close the gaps between one’s self-perception and the perception of their colleagues. However, we find that there are opportunities for growth within a self-aware 360-degree assessment report and this article will review those opportunities.

At Ambition In Motion, our 360-Degree Assessment has 5 core components: 

a.                People Management
b.                Innovation
c.                Leadership Ability
d.                Communication Skills, and 
e.                Financial Management.

While self-awareness is likely the best outcome relative to the other two possibilities, I’m next going to explain how you can leverage self-awareness to grow as a professional and identify blind spots in your professional perspective. I’m going to show why self-awareness on your 360-Degree Assessment is more than just a pat on the back, even if you and your colleagues share similar views on your performance. 

Financial Management

Financial management is a skill that is often overlooked but can have a large impact on the company. Financial management is based on one’s ability to manage the resources they oversee (including their time and the way they are spending their time at work), a company budget, and others’ perception of a person being fiscally responsible. 

If your colleagues' assessment of your financial management abilities is aligned with your own, that can be a very good thing or an opportunity for growth – depending on whether or not the score was high or low.

Self-Awareness but poor performance

If you rated yourself low in your ability to manage finances and your colleagues agree with you, this can be a major opportunity for growth. 

Before diving into the implications behind why this is an opportunity for growth, it is probably wise to assess, internally, the reasons for your low self-rating and why your colleagues would also rate you low.

In terms of yourself, why would you rate yourself low on your ability to manage your finances? Are you taking (or have taken) actions that are financially detrimental to the company? If so, did you learn and alter your actions from the circumstance? Or do you think that you simply could be doing more or doing better overall?  

One of the largest expenses for a company is human capital. Some managers will rate themselves low in financial management because they are unwilling to have difficult conversations with colleagues about productivity, and those colleagues don’t realize the implications that their actions may have on the financial viability of the company.

This is the type of outcome many tech startups find themselves in. Essentially, they will raise money with the anticipation that by the time the money runs out, they will have garnered enough traction to justify a follow-on round of investment or have enough revenue to cover expenses. The area that most startup founders struggle with is managing the finances. More often than not, they believe they have a strong idea that requires strong employees (with high salaries) to implement the idea. The ultimate balance is between quality talent (and the funds used to pay them) compared to what they produce and the relative difference in outcomes between a top-paid team and a lower-paid group of professionals. Analyzing which aspects of the business require top caliber salaries is crucial because the drop off between the top-caliber and a solid hire but with less pay can be extensive in terms of the effect on the company’s bottom line. 

If you don’t manage a team, you might think to yourself “I don’t manage a budget therefore my ability to manage finances doesn’t really matter.”

I am going to make the argument that this notion is not correct at all.

If you are paid a salary (or hourly) for the time you put in at work, you manage finances – that being the time you spend working and how effective you are in the time you do spend at work. In some cases there are egregious misuses of time like taking actions detrimental to the business like working on non-work tasks while on the clock, spreading rumors or negative gossip about other employees, and clocking in late or early. 

There is also the contemplation of whether you are optimally using your work time. For example, if you know your brain is optimally effective in the morning, you should be considering that with your daily schedule. If you choose to pursue social tasks or tasks that don’t require deep thinking in the morning, you could be squandering your brain’s daily threshold of deep mental focus. If you have open office hours or are expected to have your emails checked and responded to within an hour, you are diminishing your ability to complete any task that requires focus because you are constantly having to check your email.

Think of your salary as a budget your company allocates to you to be optimally effective at work. Are there components to this budget that are misused or could time be reallocated in a way that is leveraged more effectively? That is a question you will have to answer for yourself, but once you get to a point where you feel like you are optimally leveraging your time at work, you can start to see improvements in your ability to manage the most important budget your company entrusts you with, your salary/time.

The biggest counterpoint I hear about why not be optimally effective with your work time is “everyone else clocks out early or takes breaks more frequently than advised. There doesn’t seem to be a financial incentive to perform any more optimally, so why should I work on optimizing this?”

The answer is that how others work should not affect how you work. Back to the analogy of considering your salary like a budget your company entrusts you with. If somebody mismanages their budget, does that justify that you should mismanage your own? 

Of course not! But this is a trap that people fall into all the time.

If you gave yourself a low score for your financial management abilities and your colleagues agree with you, that is a sign that you can improve yourself.

The best way to improve your abilities in this area is to research methods for best managing your time and creating a schedule for yourself that allows you to get the optimum amount of work done in a day given your unique set of responsibilities. This is not a one-size-fits-all solution as everyone has different work tasks. If your role requires you to frequently check emails, perhaps creating a space in time once or twice a day set aside for checking your emails. You could even create a “vacation” response informing senders when you will be checking your emails next so they can anticipate a response. Of course, this would need to account for specific time-sensitive requests if necessary. 

If you are willing to take action to start improving your efficiency at work (and encouraging your team as well, if necessary) you can start to measure whether what you tried worked or didn’t work. The best way to achieve improvement is to try things you haven’t tried before.

Self-Awareness and high performance

If you rated yourself relatively high on your financial management abilities and your colleagues agreed with you, that is excellent. That is a positive sign that you are properly managing the time you are paid for both in terms of your salary and (if applicable) the budgets you have responsibility over. 

However, this is not necessarily something to get caught up in because there could be factors contributing to your colleagues' (potentially generous) rating or a lack of self-awareness causing you to rate yourself high. This may not be the case, but it is important to point out examples of these types of situations so you can assess whether they hold any weight.

For those who manage a budget, oftentimes their team will rate their financial management abilities high because as long as they receive their paycheck every two weeks, nothing else really matters. Many teams are completely unaware of which activities are the most expensive to the business. Most employees don’t understand the relative dollars they generate from their work and the specifics of why paying their specific salary is a financially responsible decision. 

Let’s use a pizza restaurant as an example. Say there are 3 people working inside the pizza place each making $10/hour and an additional manager making $20/hour. On top of that, the cost of running the ovens and the electricity comes out to roughly $5 per hour. If each pizza costs $10 and the company on average sells 10 pizzas every hour, they are driving an average net profit of $45 per hour. If the employees of the pizza place understand this, they can work on ways to try and sell more pizzas in the same hour to improve their own performance and the performance of the company – making them more valuable to the company.

Some leaders might read this story and start playing the “what if” game (e.g. what if my employee's demand raises because they understand the financial impact of their work?), coming up with every bad possible outcome if their employees knew their financial value to the company. But these old thought patterns should be reconsidered with new research.

In research from companies that leverage Open Book Management, companies in which the employees have a greater understanding of the financial implications of the company’s decisions perform better and are more profitable than companies who don’t. Conversations around raises and relative improvements to the business become substantially more tangible and objective when there is hard data justifying and showing how one person’s improved efficiency deserves greater compensation, especially compared to the “everyone gets a raise just because!” method of giving raises.

If you are an individual contributor for your company and you don’t manage a budget, per se, you still manage your time. If you consider your salary as a budget your company has entrusted you to manage, are you optimally using that budget?

One way to make improvements in this area is to identify potential opportunities for you to become more efficient at work. You could ask your boss or co-workers for feedback on ways you can be more efficient at work. And you could also provide some (ideally research or evidence-backed) suggestions for ways you have identified to help make yourself more efficient at work. Your manager will likely appreciate your drive for improvement and the fact that you came prepared with research-backed suggestions on ways you could improve your own efficiency and work output.

Overall, having a self-aware response on your 360-degree assessment report isn’t a free pass to give in to stagnation. It simply shows that you and your colleagues are on the same page. But, it doesn’t mean that there isn’t room for improvement. The implications from having a self-aware score are not wholly positive or wholly negative. Instead, it is a snapshot of your current performance which can help you make informed decisions about where you need improvement. As long as you possess an open-mindedness about making improvements and are willing to measure whether the new changes worked, you can ensure that you are on a positive track towards continual growth and improvement.