Due to the emergence of positive psychology, literature that has focused on happiness in the workplace has increased over the past two decades. Well-being has become a critical topic for today’s policy makers. Firms have also begun to shed more light on how to enhance employees’ well-being. This study examined how employees’ cognition of work environment related to cognitive engagement and psychological well-being in a South Korean conglomerate. Results of the structural equation modeling showed that perceived work cognitions of 518 employees accounted for 31% of the variance in cognitive engagement. Employees’ work cognition and cognitive engagement explained 50% of the variance in psychological well-being. In addition, cognitive engagement played a role as a partial mediator. Human resource/organization development practitioners and managers might enhance the level of employee engagement and psychological well-being by providing positive organizational support, by redesigning job context, and by enhancing relations with their leaders and coworkers.