The likelihood of innovation can be enhanced by management practices, but it is the individuals that are part of the firm that are seen as the source of the new ideas (Mumford, 2000). Individuals are the ones who develop ideas, and who propose and implement the ideas. Creativity is therefore argued to be the root to innovation (Jiang et al., 2012).
Human Resource Management (HRM) has a crucial function in stimulating innovation processes in companies (Li, Zhao & Liu, 2006), by affecting creativity (Jiang et al., 2012) and knowledge sharing (Jiménez-Jiménez & Sanz-Valle, 2011). However, this function is rather difficult to manage. They have to manage the fact that feasible solutions to novel problems do not just arise (Mumford, 2000), and recognise that knowledge or expertise is only one factor that influence creative problem solving; i.e. to develop something new requires more than the existing knowledge. Their ability to combine and reorganize information and knowledge in order to develop new understandings or new conceptual systems is a key to creative thoughts that hence also influence creative problem solving (ibid.). Furthermore, HRM then has to care for the intrinsic motivations that often drive creative individuals (Amabile, 1997).
In other words, HRM practices become crucial to how organizations influence and shape attitude, behavior and skills of individuals, of importance to whether organizations deliver innovations that corresponds with their goals (Chen & Huang, 2009). But the role of HRM in organizations is dual. On the one hand, HRM concerns policies and practices for organising and managing work, which includes the fundamental structure of the work organization. On the other hand, HRM also encompasses policies and practices to employ and manage people which includes both individual management activities as for example recruiting, motivating, developing and retaining employees, and also processes to inform, consult and negotiate with individuals and groups (Boxall & Purcell, 2011).