This study investigates the relevance of employee innovation on the performance of Small and Medium-Sized Enterprises (SMEs) in Akure Metropolis, Ondo State, Nigeria. While the criticality of SMEs to economic growth is well-established, their performance in developing nations like Nigeria is often hindered by a lack of innovation. This study addresses a significant gap in the literature by focusing specifically on employee-driven innovation as a key determinant of firm performance. The research aims to empirically examine the effect of four distinct dimensions of employee innovation, creativity, collaboration, risk-taking, and intrapreneurship on SME performance. Adopting a quantitative cross-sectional survey design, data were collected from 384 respondents across 180 registered SMEs using a structured questionnaire. The relationships between the variables were analyzed using simple linear regression with SPSS version 26. The findings reveal that all four dimensions of employee innovation have a strong, positive, and statistically significant impact on SME performance. Employee risk-taking emerged as the most influential predictor (R2=.678, p < .001), followed by employee intrapreneurship (R2=.658, p < .001), employee collaboration (R2=.637, p < .001), and employee creativity (R2=.551, p < .001). Consequently, all four null hypotheses were rejected. The study concludes that fostering an environment that encourages and empowers employees to be creative, collaborative, risk-tolerant, and intrapreneurial is a critical driver of success for SMEs in Nigeria. This research contributes valuable empirical evidence to the entrepreneurship literature within a developing country context and offers practical recommendations for SME owners and policymakers to cultivate an innovative culture, thereby enhancing organizational performance and economic contribution.