Organizations with proper human resources (HR) practices play an exemplary role in developing their employees’ innovation. Though there is extensive literature on managing organizational innovation, even in today’s scenario some organizations stand as a barrier for employees’ growth and innovation at the workplace. This study aimed to holistically explore the organizational factors affecting employee innovation using principal component analysis (PCA) and condense the dimensionalities for a better focus of organizational development. The study executed a survey questionnaire and collected useful data from one hundred and ninety-five (195) respondents of various Indian companies. The study identified forty-six sub-factors and evolved into nine major organizational factors influencing employee innovation namely organization structure, organization culture and environment, corporate strategy, innovation process, employee, technology, resources, knowledge management and management and leadership. The study recommended that any firm must focus on these factors to encourage employee innovation leading to overall organizational success. It also provides broad implications to HR managers, firm policymakers and top management to reassess and formulate the best organizational strategies to promote innovation culture in the organization.