This study is first of its kind to investigate the influence of leadership style on employee trust, employee morale and employee emotion in the context of steel industry. This set of three employee outcomes is studied in a conceptual framework comprising of a seven-month study, with a sample of 272 workers of steel firms in Chhattisgarh state, the central part of India. SmartPLS 2.0 is used to perform confirmatory factor analysis and structural equation modelling to analyse and validate the conceptual framework. The study makes a twofold contribution. First, it finds that transactional leadership style has a negative influence on employee outcomes. Second, it suggests that managers of steel firms use transformational leadership style to enhance employee outcomes. This study reveals that the outcome of a steel firm’s employee is aligned better with transformational leadership style, rather than the transactional leadership style.