Local governments in Uganda faced persistent challenges in service delivery effectiveness, with organizational structure emerging as a critical determinant of employee performance and institutional capacity. Mbale Local Government operated within a complex structural framework balancing administrative hierarchy, departmental specialization, and decentralized service delivery mandates. This study examined the relationship between organizational structure and employee performance in Mbale Local Government using a cross-sectional survey design. The research targeted 156 respondents comprising district officials, departmental heads, technical staff, and administrative employees. Data was collected through structured questionnaires and key informant interviews, achieving a 94% response rate. Analysis employed descriptive statistics, Pearson correlation, and multiple regression techniques. The study revealed a significant positive relationship between organizational structure and employee performance (R² = 0.716, F = 44.78, p < 0.001). Hierarchical structure clarity (β = 0.412, p < 0.01), departmental specialization (β = 0.376, p < 0.01), coordination mechanisms (β = 0.329, p < 0.01), and span of control (β = 0.267, p < 0.05) significantly predicted employee performance. Findings indicated that 64% of employees with clear reporting lines achieved performance targets compared to 38% with ambiguous structures. Departments with optimal spans of control (1:8 ratio) demonstrated 47% higher productivity than those with excessive spans (1:15+ ratio). Communication effectiveness scored 3.12/5.0, while role clarity achieved only 2.87/5.0, indicating structural ambiguities affecting performance. Organizational structure significantly influenced employee performance through role clarity, coordination efficiency, communication effectiveness, and accountability mechanisms. Structural deficiencies including role ambiguity, excessive hierarchical layers, poor coordination, and inappropriate spans of control constrained performance outcomes. Mbale Local Government should undertake comprehensive organizational restructuring, clarify roles and reporting relationships, optimize spans of control, strengthen coordination mechanisms, implement performance management systems aligned with structure, and invest in change management supporting structural improvements.