This study aims to examine the mediation of employee engagement on the relationship between employee psychological empowerment and employee job satisfaction, which helps to retain more customers with better service. An empirical analysis was done on Maldivian resorts, and 243 employees were randomly selected from different resorts in the Maldives. The proposed model was tested using IBM SPSS AMOS 25. The results indicate that psychological empowerment had a significant effect on job satisfaction of the resort employees through employee engagement. The Maldivian economy is based on the tourism sector, and a significant amount of gross domestic product (GDP) depends on the tourism sector. Resorts and guesthouses are the power hubs for the economic development of the country, and employees are the primary source of service providers to tourists, which helps the resorts to retain their tourists. Hence, this study concludes that employees’ psychological empowerment and employees’ engagement are crucial to improve employee satisfaction.