This study examined the effect of employee competence on the performance of small and medium-sized electronic enterprises in Kampala District, Uganda. The study was motivated by persistent performance challenges among electronic SMEs despite their growing economic importance. A cross-sectional research design was adopted, employing a quantitative approach to establish the relationship between employee competence and enterprise performance. Data were collected from a sample of 136 respondents drawn from SME owners, managers, and employees using structured questionnaires. The data were analyzed using descriptive statistics, correlation analysis, and regression analysis with the aid of statistical software. The findings revealed a strong positive relationship between employee competence and SME performance, with a correlation coefficient (R) of 0.712. Regression results indicated that employee competence explained 50.6% of the variation in the performance of small and medium-sized electronic enterprises, as reflected by an R Square value of 0.506. The model was statistically significant, with an F-value of 112.387 and a p-value of .000, leading to the rejection of the null hypothesis. Furthermore, the regression coefficient showed that a unit increase in employee competence led to a significant increase in enterprise performance, confirming employee competence as a strong predictor of operational efficiency, innovation, and overall business success. The study concluded that employee competence played a critical role in enhancing the performance of electronic SMEs in Kampala District. It was recommended that SME owners and managers prioritize continuous training, skills development, and capacity-building initiatives to improve employee competence. Policymakers and support institutions were also encouraged to design targeted programs aimed at strengthening workforce capabilities within the SME sector to promote sustainable enterprise growth.