Retail is the third largest sector of Pakistan after agriculture and industry, contributing 18% of Gross Domestic Product (GDP). From the last few years, retail sector in Pakistan is witnessing exponential growth where local brands are expanding their foot prints and international brands are penetrating with larger scale. With these industry dynamics, it is very crucial for the organizational leaders to engage and retain right employees as it effects customer services, work environment and ultimately financial results of the business. This study investigated the relationship between perceived leadership style and employee engagement. The study also investigated the relationship between perceived leadership styles and behavioral outcomes of employee engagement. The study further investigated the moderating effect of psychological empowerment on the relationship between leadership styles and employee engagement. Survey questionnaire was used to collect data from 429 employees working in retail organizations. For data analysis, researcher used statistical software SPSS 22 to conduct descriptive analysis, analysis of variance, correlation and reliability analysis and AMOS 24 to conduct normality, confirmatory factor analysis and structural equation modelling. The findings of the study in the socio-cultural context of Pakistan concluded that classical leadership style is negatively associated with employee engagement. However, transactional leadership style, visionary leadership style, and organic leadership style have positive relationship with employee engagement. The research also concluded that there is an inverse relationship between classical leadership style and behavioral outcomes ‘say’, ‘stay’ and ‘strive’ of employee engagement. Also, there is positive ii relationship between transactional leadership style, visionary leadership styles, organic leadership style and behavioral outcomes say, stay and strive of employee engagement. The study further concluded that psychological empowerment does not moderate the relationship between classical leadership style and employee engagement. It is also elucidated that psychological empowerment does not moderate the relationship between transactional leadership style and employee engagement. However, psychological empowerment restraints the positive relationship between visionary leadership style and employee engagement. Also, psychological empowerment restraints the positive relationship between organic leadership style and employee engagement. This study has theoretical as well as practical implications. This study is unique in Asian context; specially in the socio-cultural context of Pakistan. This study has significant contribution in retail sector as Pakistan has world’s fastest growing retail sector. This study has contributed in the theory by broadening the known understanding of leader member exchange theory in Asian context and in retail sector. This study has significant contribution for the industry practitioners as outcomes of this study are useful in leadership development strategies. This study has unique contribution as it has espoused Avery’s leadership paradigm which is rarely investigated in relationship with employee engagement and behavioral outcomes of employee engagement.