This study aimed to evaluate the impact of workplace conflict on employee performance and organizational productivity at Kagadi General Hospital. As the hospital provides critical medical services yet faces resource constraints, optimizing productivity through strengthened workplace harmony is paramount. However, the facility lacked data on specific conflict issues and their consequences. The research employed an explanatory mixed methods design. In March 2022, quantitative data was collected using a survey distributed to 200 purposively sampled clinical and support staff. Questions examined frequency and sources of conflicts experienced, as well as perceived impacts on job functioning. Concurrently, qualitative data was gathered through in-depth interviews with 20 staff members across varied departments who had worked at the hospital for at least three years. Interviews explored personal perceptions of conflicts, observed effects, and suggestions for improvements. Following data collection, survey responses were analyzed using SPSS. Descriptive statistics identified dominant conflict types and their correlation with job engagement indicators. Interviews were transcribed and subjected to thematic analysis using NVivo. Prominent themes centered on root causes of tensions like understaffing and inadequate supervision, in addition to resultant decreased morale and productivity witnessed. From the findings, it was observed that 30 (75%) of the sample strongly agreed that Inter-group conflict kills loyalty in the organization or department and diminished workers’ productivity of the enterprise and as a result, fraud was mitigated, 8 (20%) agreed to the assertion and 2 (5%) disagreed. This implied that indeed Inter-group conflict kills loyalty in the organization or department and diminishes workers’ productivity of the enterprise when using the internal conflicts and as a result, fraud was mitigated since the majority agreed to the assertion. The researcher also recommends that organisations should prioritize the information management department since it is a very vital cost center