Organizations are facing increased economical, technological and labor market challenges. In addition, they are confronted with the pressure to broaden the employees’ participation in learning for sustainable development. Despite, manifold efforts made towards learning in the workplace, the trends in adult learning participation in Pakistan have remained unchanged for decades. The organizations are relying more on formal training and learning activities whereas informal ways of learning are not used to a large extent. The employee engagement in informal learning activities (ILAs) is more important than formal learning because it contributes to more than seventy percent of total learning. The connection between human resource management practices and organizational performance has been well established in variety of settings through employees’ participation in ILAs. There are some theoretical and methodological gaps that need further investigation. The main research question to guide this study is how does HRM system (content and process) impact employee participation in ILAs that includes reflection (RE) on daily activities, knowledge sharing (KS) and innovative behavior (IB) at the workplace. The purpose of this study is to propose a model that explains the process in which HRM system, in terms of content (Perceptions of performance appraisal quality) and process (perceptions of HRM system strength), is linked to these ILAs under HR system strength (HRSS) theory. Additionally, it is highly advised by the literature the relationship of HRM system with organizational performance is no more recognized as a direct relationship. The psychological empowerment (PE) as a positive job attitude plays a vital role in shaping the behaviors of individuals in the workplace. Thus, building on the HRSS theory, social cognitive theory and empowerment theory, the PPAQ and ILAs relationship is better explained as mediated by PE. Moreover, it becomes imperative to examine the moderating role of PHSS in the relationship of PPAQ with employees’ attitudes (PE) and behaviors (ILAs) simultaneously. Quantitative cross-sectional data were collected from the faculty members of twelve public sector Higher Education Institutes/Universities (HEIs) of Islamabad Pakistan. Partial least squares structural equation modeling (PLS-SEM) is used for statistical analysis of the quantitative data collected through self-administered questionnaire. Confirmatory factor analysis was used to determine the construct validity, composite reliability, convergent validity and discriminant validity. It appeared that the perceptions of performance appraisal quality (PPAQ) is positively linked with PE, RE, KS and IB. The PE is appeared to positively influence ILAs (RE, KS and IB). In addition, PE mediates the relationship between PPAQ and these three ILAs. Further, perceptions of HRM system strength (PHSS) as a moderator is supportive to employees’ PE and ILAs (RE, KS and IB). The direct and interaction effect models have small predictive relevance for all three ILAs. The contribution of this study is manifold as it integrates the different views and approaches into one single model to explain the mystery of ‘black box’ in HRM and organizational performance relationship. The novel is the mediating role of PE in explaining the relationship fetched new understandings for the researchers and practitioners in the field of organizational behavior, organizational learning and human resource development (HRD). In addition, the study contributes to the literature by demonstrating that PHSS have incremental effects on employees’ PE and ILAs. The practical implications and future directions are also discussed.