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In this video, Erin from Time Saving Templates introduces the new employee performance review template. This template is designed to streamline the process of entering performance ratings for employees, which is essential for various related tasks. The employee performance ratings can be copied and pasted into this template to facilitate calculations in the variable compensation bonus worksheet, enabling the setup of a bonus matrix based on performance. Additionally, it's useful for the annual merit increase template to determine base pay increases for employees based on their ratings. The template accommodates up to 20 employees, with distinct tabs for each employee’s details.