Should I be humble and minimize what I really think and feel I do for the company, or should I be honest in my response? I don't want to seem narcissistic, but I can point to many positive and money-saving "wins" that I have accomplished this past year.
Humility is a great attribute. You should be humble all the time, except when writing your self-appraisal. Your manager is busy and has no idea of all the things you do. Unless your client groups or coworkers are sending your manager regular E-mails saying, "Just wanted to let you know how much we appreciate Bob," some of your fine work will be left unnoticed.
That is, in my opinion, how it should be. Good employees don't need to run every little thing by a manager. As a result, managers don't always know all the problems good employees solved on their own. (In an annoying little irony, sometimes managers think their mediocre employees do more work because those employees are constantly in the manager's office asking for help. You have to make sure you aren't penalized for doing the work on your own.)
So, when you write your self-appraisal, explain how wonderful you are. Now, don't exaggerate. That will come back to bite you. (Trust me on this one—if you take credit for something you didn't do, your manager will know you are full of it.)
Here's a dirty little secret of managers: They hate writing performance appraisals. Hate, hate, hate it. So, make it easy for them by writing a fabulous self-appraisal. Send an electronic copy, and hope that the manager will copy and paste from your self-assessment into your formal appraisal.
I realize that in an ideal world, your manager will have been meeting with you in regular one-on-one meetings and will not need a self-appraisal to evaluate you properly. I doubt you live in an ideal world. So toot your own horn.
Suzanne Lucas has nine years of human resources experience, most of which has been in a Fortune 500-company setting. She holds a professional in human resources certificate from the Society for Human Resource Management. She blogs at Evil HR Lady.