This study investigated the effect of workplace conflict on employees' performance and organizational productivity, using Lyantonde General Hospital as a case study. Workplace conflict remains a persistent challenge in healthcare institutions, where high workloads, resource constraints, and interdisciplinary interactions create fertile ground for interpersonal and role-based disputes that can undermine service delivery. The study was guided by three specific objectives: to examine the levels and forms of workplace conflict at Lyantonde General Hospital, to assess the level of employee performance, and to establish the relationship between workplace conflict, employee performance, and organizational productivity. A descriptive correlational research design was adopted, targeting a population of 190 health workers and support staff, from which a sample of 128 respondents was selected using the Krejcie and Morgan (1970) table and stratified random sampling across departments. Data were collected using a structured questionnaire and analysed using SPSS version 26, applying descriptive statistics, Pearson correlation, and multiple linear regression. The findings revealed a significant negative relationship between workplace conflict and employee performance (r = -0.529, p < 0.01) and between workplace conflict and organizational productivity (r = -0.487, p < 0.01). Regression analysis showed that workplace conflict significantly and negatively predicted employee performance (β = -0.529, p < 0.001), explaining 28.0% of the variance (R² = 0.280), and jointly with employee performance explained 39.6% of the variance in organizational productivity (R² = 0.396, F(2,125) = 40.99, p < 0.001). The study concludes that unresolved workplace conflict significantly undermines both employee performance and organizational productivity at Lyantonde General Hospital and recommends strengthening conflict management mechanisms, including structured grievance handling procedures and regular team-building interventions.