Purpose – This study aims to explore the nature and role of knowledge relevant to service employees’ individual innovative behaviour and leading to initiating innovation within the sub-sector of personal-interactive services. Design/methodology/approach – A case study research method was applied to achieve the research objectives that examined and compared two personal-interactive service environments of two hotel properties. Semi-structured interviews were conducted along with other qualitative research methods, including; direct observation of employees, review of management archives/literature and ‘micro cases’ assessment. Originality/value – The study outcome contributes to service innovation research by identifying additional implications of the nature and ancillary role of knowledge and also by unravelling four patterns of service employees’ individual innovative behaviour. Practical implications – The study recommends practical measures to encourage knowledge integration at internal and intra-organisational levels.