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In this tutorial, Erin from Time Saving Templates introduces the new Employee Performance Review template. The purpose of this template is to streamline the process of entering employee performance ratings, which are necessary for other tools like the variable compensation bonus calculation worksheet and the annual merit increase template. Both of these tools depend on performance ratings to create bonus matrices and determine base pay increases. Erin showcases a blank version of the Employee Performance Review template, which is configured to accommodate data for 20 employees, with separate tabs for each employee's details.