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Orientation: The positive organisation creates a framework in which its elements can be investigated in relation to the retention of talent.Research purpose: The aim of this study was to investigate if leader empowering behaviour can positively impact on role clarity, psychological empowerment and work engagement, with the final outcome being the retention of talent.Motivation for the study: In the ever changing work environment organisations place great emphasis on their human capital. The positive organisation utilises specific elements to optimise human capital’s potential. It is therefore important to identify the elements contributing to a positive organisation as well as the elements which lead to the retention of talent.Research design, approach and method: A survey research design was used. A convenience sample (n = 179) was taken from a business unit in a chemical organisation. The Leader Empowering Behaviour Questionnaire, Measures of Role Clarity and Ambiguity Questionnaire, Measuring Empowerment Questionnaire, Utrecht Work Engagement Scale and the Intention to Leave Scale were administered.Main findings: Leader empowering behaviour, role clarity and psychological empowerment predicted work engagement. Role clarity interacted with competence to affect employees’ dedication and interacted with the development of employees to affect absorption. Work engagement predicted employees’ intention to leave.Practical/managerial implications: Organisations should foster the elements of a positive organisation if they want to retain their talent.Contribution/value-add: The results of this research contribute to scientific knowledge about the effects of a positive organisation on retention.How to cite this article: Mendes, F., &amp; Stander, M.W. (2011). Positive organisation: The role of leader behaviour in work engagement and retention. SA Journal of Industrial Psychology/SA Tydskrif vir Bedryfsielkunde, 37(1), Art. #900, 13 pages. doi:10.4102/sajip.v37i1.900