Studies of employee innovative behavior have predominantly focused on private sector employees and their innovative capabilities; however, there is little understanding of its value in the public sector. Nevertheless, some empirical studies explore the factors that foster such behavior and its consequences in public sector services (PSSs). The overall aim of this dissertation is to contribute new knowledge and understanding of employee innovative behavior in PSSs. This dissertation and all four of the appended published papers conceptualize and empirically investigate the fostering factors and consequences of employee innovative behavior. All four papers employ online surveys and questionnaires to gather data, develop empirical models, and test the proposed relationships using the partial least squares structural equation modeling (PLS-SEM) statistical technique with Stata and SmartPLS statistical programs. This dissertation and the papers acquired empirical data from three branches of the public sector: transport, higher education, and health. This dissertation contributes to the research literature in three ways. First, it extends our current understanding of the three levels of fostering factors — organizational, environmental, and individual—on employee innovative behavior in PSSs by demonstrating the key strategic drivers of successful innovations in the currently changing economic environment. Second, it adds new knowledge about the consequences of employee innovative behavior by revealing the importance of organizational commitment for retaining innovative employees. Third, it contributes knowledge on the benefits for this topic of using more advanced quantitative research techniques. This dissertation reveals the importance of public managers possessing leadership qualities and acquiring skills to encourage, cultivate, and nurture employee innovative behavior. Moreover, this dissertation reveals the significant role of policymakers in acquiring knowledge to improve the guidelines and regulations that promote and enable innovation in work environments. Furthermore, it shows the benefits of employing complex research methods such as PLS-SEM in social science research and advances the scholarly debate on employing such techniques. Overall, the dissertation contributes to the ongoing academic conversation on the vital role of employee innovative behavior in PSSs.