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Organizations must cope with the current business demands and strive for a competitive advantage. Apart from many measures to enhance competitive advantage, employees’ innovative work behavior is instrumental. Hence, this study aims to measure the contribution of person-environment fit (person-job fit and person-organization fit) on innovative work behavior directly and indirectly through creating work engagement. Cross-sectional perceptual data were collected through surveys from the employees working in humanitarian non-profit organizations in Nepal. After ensuring the goodness of fit index, 499 responses were analyzed in the structural equation model showing path analysis with the help of AMOS. The conservation of resource theory was a foundation to test and analyze the hypotheses adopting positivist research philosophy and deductive reasoning approach. Regression analysis revealed a positive effect of person-job fit (B = .23, p < .001) and person-organization fit (B = .20, p < .001) on employees’ innovative work behavior. Work engagement mediated the influence of person-job fit and person-organization fit on innovative work behavior. Out of the total effect size of employees’ compatibility on innovative work behavior, 30% effect size of person-job fit and 23% effect size of person-organizational fit on innovative work behavior went through work engagement.
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