The studyentitled “Effective Supervision and Employee Performance: A Case of FINCA, Mbarara Branch” sought to establish the relationship between effective supervision and employee performanceat FINCA, Mbarara Branch. The specific objectives of the study were to assess the relationship between supervisor development and employee performance, establish the relationship between supervisor eligibility and employee performance and examine the relationship between supervision capacity and employee performance of FINCA Mbarara Branch.This was in accordance with scholarly postulations byBoyatzis (2012), Burton and Hoobler (2006) and Chiang and Birtch (2010), who variously captured the connection between effective supervision and employee performance. The study used a cross-sectional research design to collect data from a sample of 70 respondents selected using simple random and purposive sampling.

The study established that supervisor development,supervisor eligibility and supervision capacity marginally accounted for improvement of employee performance. This finding was supported by the Adjusted R square values of 0.022 (supervisor development), 0.171 (supervisor eligibility) and 0.055 (supervision capacity) on employee performance. This means that other factors yet to be identified accounted for most of the improvement inemployee performance, so noted the study. Therefore, the study concluded that effective supervision could not be held to entirely account for employee performance. The study recommends that FINCA Mbarara Branch needs to have transparent process of identifying staff to be developed and supported as supervisors. It also needs to publish the criteria to be met by all prospective supervisors as well as invest resources in building supervision capacity.