PurposeThe research intended to identify the impact of employee exploitation on knowledge-sharing behavior and withdrawal, not in isolation, but by taking psychological ownership and psychological detachment as mediating variables. Moreover, the research aims to identify optimism’s moderating role concerning employee exploitation and psychological ownership. The research aims to suggest the management implementation of the human-centric business process and, subsequently, management to obtain maximum output from employees.Design/methodology/approachPositivism research philosophy followed by a deductive approach is adopted to meet the objectives of the current study. Survey techniques with a self-administrated questionnaire were used to collect data from employees working in public sector organizations. Moreover, 255 employees with the highest qualification were shortlisted to capture the variables’ impact. Data analysis was done by using SEM-AMOS approaches and obtained structural and path models to test the formulated hypotheses.FindingsResults suggested that employee exploitation has a significant relationship with withdrawal, and psychological detachment mediates the relationship. The other path suggested the insignificant role of optimism as a moderator in the relationship between employee exploitation and psychological empowerment. However, psychological empowerment fully mediates the relationship between employee exploitation and knowledge-sharing behavior.Originality/valueA plethora of research is available on employee exploitation; however, the current research is first to capture both positive and negative paths in public sector organizations. It provides clear insights for managers to reformulate and reanalyze their organizational policies to get employees' positive attitudinal and behavioural outcomes.