Should leaders pay more attention to values? The present study aims to examine and explain the associations of engaging leadership (EL) with employees' perceptions of the organization's values, need fulfillment, and employee engagement. EL is a recent leadership concept drawing on self‐determination theory, specifically on the fulfillment of the basic psychological needs of autonomy, competence, and relatedness. We expected EL to associate with employees perceiving the values of their organization as more intrinsic (e.g., care for others, contributing to making the world a better place, stimulating personal growth), which would satisfy employees' basic psychological needs and fuel work engagement, rather than as extrinsic (financial success, power, status). Study 1 detailed the model using a cross‐sectional study design ( N = 436), and, as expected, structural equation modeling identified a positive path from leadership to work engagement via perceived intrinsic organizational values and subsequent satisfaction of the need for autonomy. EL associated negatively with extrinsic organizational values. Study 2 corroborated outcomes of study 1 through a longitudinal study across three time‐points ( N = 69) in a cross‐lagged panel model and found specific directionality from leadership to perceived intrinsic values. Implications for leadership and motivation are discussed.
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