This thesis shows what leadership is and what the leadership process looks like and how it affects employee motivation and engagement. Namely, the reward system, which consists of material and non-material compensations, plays a key role in this. The paper also mentions the essential characteristics of a leader whose characteristics, which can be analyzed according to a certain leadership style, also significantly influence the motivation and engagement of employees. The work also shows that due to constant changes in technology, society and the business environment, managers must be adaptable and must continuously manage teams, motivate them and establish quality communication, but it is also important to develop their leadership skills frequently. Leadership implies different leadership styles such as transformational leadership, coaching, super-leadership and others. A questionnaire was conducted on a sample of 205 people with the aim of proving the main hypotheses that the characteristics of managers and reward systems have a significant impact on employee motivation and engagement. The research showed that the majority of respondents agree with the hypothesis.