According to Mazzanti et al. (2006), set of industrial relations variables (e.g. „good quality atmosphere‟ and „involvement of worker representatives and employees‟) does emerge as a significant factor to explain organisation innovation intensity. Oldham (2003) uncovers that supervisory and peer support to be critical for sharing of new ideas and thinking among employees. This kind of work climate can positively influence innovation activities of the organisations. RETAINING ROLE Organisations need to sustain its innovation potential for a longer period of time by retaining creative workforce, experts and individual innovators. This can also be possible through the HRM practices. The sustainable performance in innovation not only depends on the ability to generate innovation potential and make innovation taking place, but also protects or retains generated innovation potential. „ Organisations must work hard to maintain the interest and energy level of their most talented employees. Otherwise, they will simply disappear ‟ (Campbell- Allen et al., 2008).
11 th International Conference on Business Management - 2014 62 Eriksson et al. (2014) found that innovative organisations have higher technical employee turnover rate than non-innovative organizations. This is also consistent for the organisations that are implementing research and development projects and are producing new commercial products. Further, the increase in employee turnover rate discourages the organisation‟s research and development efforts and activities and lowers its innovation performance. During the downsizing, organisations must carefully handle their research and development staff by distinguishing them from others without affecting their organizational innovative abilities and capacities (Mellahi and Wilkinson, 2010). An organisation‟s accumulated innovation potential and capabilities can erode due to inadequate or poor people management practices (Santiago, 2013). Using training and development practices is vital to upgrade employee skills and retain creative employees, while adopting new job design to split creative (core) employees from others. Retaining creative employees cannot be ignored, since they are the source of organisational innovation (Bae and Rowley, 2004 as in Zhu et al., 2007).For example, transparent conflict management practices (Roche and Teague, 2012), opportunities for continuous education and learning, sabbaticals, stock ownership options for innovative employees, good employee relations are some of the essentials for retaining creative employees in organisations. Realizing these roles of HRM practices on organisational innovation may create a significant impact on sustainable organisational innovation. Approaching HRM practices with these lens, ultimately lead to two outcomes: (1) HRM innovation and (2) organisational innovation and productivity. As there is no a constructive definition for HRM innovation, this review has adapted „management innovation‟ definition of Birkinshaw and Mol (2006) : „