The study made a significant contribution to the existing body of knowledge by integrating different aspects of organizational climate, transformational leadership and innovative work behavior. The study directly benefited the managers as they should become aware of the role of their leadership style in creating a climate that is conducive for employee innovative work behavior. The study provides guidelines useful for managers in enhancing employee's innovative behaviors. Organizations can train managers to become leaders so they create conducive organizational climate to ensure innovative behavior. The management may focus on transformational leadership as a fundamental aspect of supervisory practices due to its impact on perceptions of organizational climate and innovative work behavior. Human resource development is the burning issue these days. A lot of effort is being made to raise the level of the employees to have innovative and competitive organizations. The current study helps policy makers to make policies for human resource development and have a more development oriented environment which would help in having competitive organizations.