This study investigates the intricate relationships among innovative HR practices, innovation capabilities, innovative work behaviour, digital adoption, transformational leadership, and employee performance within the pharmaceutical industry of Pakistan. The present investigation employed a cross-sectional study design and a non-probability convenience sampling approach to gather data from employees in the pharmaceutical companies located in Karachi, Pakistan. To investigate these relationships, data from 305 employees of different pharmaceutical companies in Karachi were analysed using a structural equation modelling technique. The results reveal that implementing innovative HR practices significantly impacts employee performance by enhancing innovation capabilities and encouraging innovative work behaviour. Additionally, the study demonstrates the moderating role of the Technology Acceptance Model and Transformational Leadership in shaping these relationships, highlighting the contextual complexity within the pharmaceutical sector. The findings emphasize the importance of fostering innovation capabilities and promoting innovative work behaviour among employees to improve organizational performance. Moreover, the influence of digital adoption and transformational leadership underscores the need for organizations to leverage technology and effective leadership to maximize the benefits of HR innovation. While previous research has explored the impact of HR innovation on firm performance, this study uniquely considers the role of digital adoption in shaping the effectiveness of HR practices. Moreover, the examination of innovative work behaviour as a mediating factor adds a new dimension to our understanding of how employees engage with HR innovations and contribute to organizational success. By incorporating these innovative elements into the research framework, this study offers fresh insights into the dynamics of HR innovation and its implications for employee performance.

Keywords: Innovative HR practices, Innovative Work Behavior, Digital Adoption, Transformational Leadership, Employee Performance, Innovation Capabilities.