Purpose Organizational cynicism is a growing trend in contemporary organizations. However, its impact on employee performance remains understudied. The purpose of this study is to address this gap by investigating the effect of three dimensions of organizational cynicism (cognitive, affective and behavioral cynicisms) on employee performance. The study also investigates the moderating effect of employee engagement on the relationship between three types of organizational cynicism and employee performance. Design/methodology/approach Primary data are collected through questionnaire from employees (N = 200) of various health organizations in Pakistan by using a convenient sampling technique. Hierarchal multiple regression models are used by using SPSS. Findings The findings reveal that all three types of organizational cynicism (i.e. cognitive cynicism, affective cynicism and behavioral cynicism) have a significant negative relationship with employee performance, while employee engagement moderates this relationship. Moreover, the findings indicate that the majority of respondents are not happy with their organizations. They have the feeling that their organizations are not fulfilling their promises, in fact, are betraying them in different ways. This breach of contract becomes the reason for organizational cynicism among employees and negatively affects their performance at work. Research limitations/implications The study has a large population size and it is quite difficult to address the whole population and collect data from a large sample because of time and limited budget. Practical/implications The organizational culture can mitigate the negative effect of organizational cynicism and enhance performance by promoting employee engagement. The study helps psychologists to understand employees’ attitudes and improve personnel selection to ensure they recruit the right people. Openness, honesty and early communication can increase predictability and controllability of future events. Social implications The job insecurity and lack of adequate compensation are assertive factors towards low productivity and negative attitude toward organization. Originality/value According to the researchers’ best knowledge, only few studies tried to investigate the relationship between organizational cynicism and employee performance by using the moderating effect of employee engagement. Therefore, it will be a good contribution in existing literature to understand consequences of cynicisms.