Abstract
Thriving is increasingly recognized as essential for sustainable performance, yet the mechanisms linking thriving to performance remain underexplored, particularly in service settings where employee–customer interactions are central. Drawing on social cognitive theory and the socially embedded model of thriving, this study examines personal and contextual factors influencing the thriving–performance relationship. Data were collected from 349 service sector employees in Pakistan at two time points and analyzed using structural equation modeling and PROCESS macro. Findings indicate that thriving positively impacts performance, with psychological capital acting as a mediator. Servant leadership and organizational virtuousness were identified as contextual moderators: servant leadership amplifies the effect of thriving on performance through psychological capital, whereas excessive organizational virtuousness can attenuate it. This study advances the literature by integrating personal and contextual factors in the service sector and highlights the nuanced roles of leadership and organizational practices, offering practical insights for fostering environments that enable employees to thrive and achieve sustainable performance outcomes.