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Although the development of public organisations and the continual enhancement of public services depend on the creative behaviour of public employees, it is uncertain from earlier studies how and when inclusive leadership (IL) affects innovative behaviours (IB). This study aims to resolve the inconsistency in the literature by applying social exchange theory to examine the effect of inclusive leadership on employees’ innovative behaviour, while also examining the mediating role of work engagement and the moderating effect of psychological safety within this relationship.

The research model’s analysis draws from a data set of 200 employee–supervisor dyads. Data was collected from employees across diverse public sector organisations in the United Arab Emirates (UAE).

The results demonstrate that IL indirectly (via WE) and directly has a positive influence on employees’ IBs. This influence is enhanced when employees feel safe and do not have to be concerned about negative consequences.

Our study highlights a less-explored sector, unveiling the motivations behind IB among public sector employees. Moreover, this study provides valuable insights within a non-Western context, offering a unique perspective on the intricate relationship between IL, PS, employee engagement and IBs in the UAE public sector.

Although the innovative behaviour of public employees is critical for the creation of public value and meeting of public interests, the authors are uncertain about the role of the human resource (HR) system in affecting individual behaviour as past studies tended to discuss innovation at the organisational level of analysis. Based on corporate human resource management (HRM) literature, the authors draw from the ability-motivation-opportunity (AMO) model to examine the influence of innovation-based HR practices on work-related risk propensity and innovative behaviour and the moderating role of perceived error tolerance of public sector organisations.

Dyadic data were collected from supervisors and their subordinates in various public sector organisations in the UAE. The authors collected valid responses from 100 managers and 200 employees.

This study's findings demonstrate that the HR system in the public sector shapes employees' behaviour at the individual level of analysis, consistent with the corporate HRM literature. The authors reveal that innovation-based HR practices significantly promote employees' innovative work behaviour because they trigger their inclination and disposition to take risks. Furthermore, the authors provide evidence that such risk-taking propensity at work is heightened under the conditions of a high level of error tolerance by the organisational management.

This study's findings point out the importance of implementing innovation-based HR practices, such as recruitment, reward and training, to drive public sector employees' innovative work behaviour as they could galvanise their risk-taking propensity and, subsequently, innovative behaviour. Public sector managers also need to develop an innovation culture tolerant toward employees' mistakes to further foster employees' work innovativeness. Policy wise, this study's findings could be integrated into the national innovation strategy to drive the national growth in the UAE.

This study sheds light on the drivers behind innovative behaviour among public employees, which is a less researched area, especially in a non-Western context.