The aim of the current study was to examine the interrelations of important work related variables within small New Zealand based hospitality organisations in order to enhance the understanding of factors that contribute to success within these organisations. Of particular interest was the role of employee work environment perceptions (psychological climate) in relation to employee work engagement, intention to leave and organisational citizenship behaviour directed at the organisation (OCBO). Two theoretical models were tested to investigate the expected role of psychological climate. Model 1 was a mediation model wherein work engagement was expected to mediate between psychological climate, and intention to leave and OCBO. Model 2 took an alternative approach in which psychological climate was posed as a moderator of predicted work engagement-intention to leave and intention to leave-OCBO relationships. In total, 177 surveys were included in the data analyses. The results provided full support for Model 1, showing significant relationships between all psychological climate dimensions and work engagement. Work engagement in turn was negatively related to intention to leave and positively related to OCBO. Work engagement mediated the relationships between the psychological climate dimensions and intention to leave and OCBO. Little support was found, however, for Model 2. Although, as predicted, there were negative relationships between work engagement and intention to leave, and intention to leave and OCBO, intention to leave was not found to mediate between work engagement and OCBO. More importantly, no moderation effects were observed for the psychological climate dimensions. No causal inferences may be drawn from the results of this study. Nevertheless, the findings do suggest that psychological climate has an important role to play in determining levels of work engagement, which in turn impacts on employee intentions to leave their jobs and to voluntarily demonstrate behaviours that can enhance organisational effectiveness. Additionally, the negative correlations between intention to leave and OCBO indicate that employees who are seriously entertaining the idea of exiting the organisation may reduce their levels of OCBO. It is suggested that owner/managers of small hospitality organisations actively focus on modifying aspects of the work environment that are likely to promote favourable work environment perceptions and positively shape employees work-related affective-cognitive state.