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Erin from Time-Saving Templates introduces the newly added Employee Performance Review Template. This template is designed to simplify the process of inputting employee performance ratings, which is crucial for other tools like the variable compensation bonus calculation worksheet and the annual merit increase template. These tools use performance ratings to establish a bonus matrix and determine merit-based pay increases. Erin shows the blank version of the Employee Performance Review Template, which accommodates details for up to 20 employees, with separate tabs for each employee's information.