This study investigates how well-being-oriented human resource management (HRM) practices shape employees’ innovative work behavior, incorporating work engagement as a mediating mechanism and servant leadership as a moderating factor. Data were gathered using a stratified sampling approach from five service and manufacturing sectors in Pakistan. After screening for incomplete, duplicate, and outlier responses, 278 valid cases were retained for analysis. Structural equation modeling was carried out using AMOS 21.0 to test the proposed hypotheses. The results show a significant association between well-being-oriented HRM practices and innovative work behavior, with work engagement serving as a partial mediator in this relationship. Additionally, servant leadership was found to moderate the link between well-being-oriented HRM practices and work engagement. These findings offer practical value for service organizations and policymakers seeking to foster innovation in a rapidly evolving competitive environment. The study advances the literature by highlighting an underexplored perspective on how well-being-focused HRM practices promote innovative behavior and by underscoring the role of employee engagement in this process. It also addresses a gap in quantitative research on the effects of well-being-oriented HRM approaches on innovation within developing-country contexts.