The public sector has begun to recruit employees with outstanding psychological capital (PsyCap) as a way to improve performance, expecting them to find unusual ways to correct errors in service delivery and redesign work processes. This study aims to examine the effect of leader–member exchange (LMX) and PsyCap on job crafting and innovative behavior, respectively. In addition, the effect of job crafting as a mediator between the interactions of LMX, innovative behavior, and PsyCap was also analyzed. This study surveyed 105 entry-level employees from a government office in Indonesia, and analyzed the data using Partial Least Squares. The results show that PsyCap has a positive and significant effect on job crafting and innovative behavior. LMX does not significantly affect either job crafting or innovative behav-ior; thus, job crafting does not have a significant mediatory effect. The limitations of this study include the fact that it was conducted in the governmental sector of a country, and the framing of LMX and PsyCap as the drivers of job crafting and innovative behavior. This study also sug-gests ways for the governmental sector to enhance the innovative behavior of their employees by focusing not only on personal resources but also on high-quality relationships with supervisors.
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