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Human beings are living in the era of changes that require the organization and individuals to be more dynamic and responsive to the emerging forces and changes. These changes resulted in complexities at work place, development of people related issues etc., which require timely, innovative and practical solutions.The HRD climate of an organization plays a very important role in ensuring the competency, motivation and development of its employees. The HRD climate can be created using appropriate dimensions. HRD climate contributes to the development of the capabilities of individuals, team and the entire organisations. It has a major influence on human performance through its impact on individual Motivation and job satisfaction. The need for HRD, which is facilitated by favourable HRD climate, is all the more important in service organizations like hospitals. Management of large hospitals is one of the biggest challenges faced today. The application of modern management principles would pave the way for rationalizing and standardizing the services offered to achieve the objectives of profitability and patient satisfaction services.