This paper proposes an improved droop control algorithm to ensure the proportional load distribution among multiple parallel inverter-sourced generators in a microgrid, operating in an islanded mode. The improvement is done by including derivative term in the conventional droop control scheme so that the oscillatory modes of the controller can be damped and better dynamic performance is achieved. The proposed controller is a two steps decentralized tunable controller; in which control gains are scheduled via small-signal stability analysis of the microgrid study system, consisting of three inverter-interfaced distributed-generation (DG) units and one static load. The performance of the proposed control method is verified by implementing it under diverse operating conditions and desired damped responses are obtained in all cases that can be seen from simulations.