The current study strives to examine the determinants of employee innovative work behavior and job performance. Therefore, an integrated research model is developed with the help of paternalistic leadership style and job embeddedness theory to investigate employee behavior toward innovative work behavior. The research model is extended with the moderating effect of environmental dynamism between the relationship of innovative work behavior and employee job performance. Data were collected from 411 employees working in small medium enterprises. For inferential analysis, the structural (...) equation modeling technique is used. Results of the structural equation modeling revealed that altogether paternalistic leadership style and factors underpinning job embeddedness theory have explained 52.1% of the variance in employee innovate work behavior. The findings of this research suggest that managers and policy makers should focus on benevolent leadership, moral leadership, and on-the-job embeddedness to boost employee job performance and innovative work behavior. (shrink)