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Erin from Time Saving Templates introduces the newly added Employee Performance Review Template. This template facilitates the process of inputting employee performance ratings, which are essential for several calculations. It connects with a variable compensation bonus calculation worksheet that helps establish a bonus matrix based on performance ratings. Additionally, it interacts with an annual merit increase template, allowing for differentiated base pay increases according to performance. The template is designed for 20 employees, featuring a dedicated tab for each. Erin provides a blank version for demonstration, emphasizing its user-friendly setup.