Inspira- Journal of Modern Management & Entrepreneurship (JMME) 295 ISSN : 2231–167X, General Impact Factor : 2.3982, Volume 07, No. 04, October, 2017, pp. 295-298          Bhumika Sharma ∗ Satinder Pal ∗∗ Hardeep Singh Saini ∗∗∗ ABSTRACT The objective of this review is to explore the theoretical and empirical findings of research work, which link human resource management (HRM) practices with innovation. Innovation focused on the bundles of HRM practices to develop and sustain innovative potential and capacity of small and medium- sized enterprises (SMEs). Findings of this review reveal the role of theoretical and empirical status of HRM practices in development and retention of innovation potential and capacity of SMEs, and further enhance the existing body of knowledge and the literature concerning the relationship between HRM practices and innovation. In addition, this review demonstrates the key roles of HRM practices for promoting innovation in SMEs. KEYWORDS: Human Resource Management Practices, Innovation, Small & Medium-sized Enterprises.  Introduction It has been widely acknowledged that effective human resource management (HRM) practices are significant in extracting positive work behaviours among employees, which consecutively lead to organisational innovation (Damanpour & Gopalakrishnan, 1998; Tan & Nasurdin, 2010). Organisational innovation has been viewed as an essential weapon for organisations to compete in this competitive business environment which aim to immerse themselves in higher value-added activities such as, developing new products, processes, and services to continually sustain the competitiveness within the rivalries. One of the ways to heighten the organisational innovation is through effective human resource management (HRM) practices and effective knowledge management. HRM practices set the tone and condition of the employer-employee relationship which can encourage the employees to become more innovative (Rousseau & Greller, 1994). Human Resources (HRs) Human resources (HRs) are a term used to describe the individuals who make up the workforce of an organisation, although it is also applied in labour economics to business sectors or even whole nations. William R. Tracey (2003) defines human resources as ‘the people that staff and operate an organization.’ Human resources are the human labour, the physical abilities, and mental abilities that produce the goods and services of businesses. In a business, the terms human resources are often used to refer to management of the people employed by the business. Human resources management specialists recruit and interview employees, advising on hiring decisions in accordance with policies and requirements that have been established in conjunction with management, provide training to enhance employee skills, and develop compensation plans and incentive programs to motivate employees. In some businesses this is called personnel management. ∗ Indo Global Colleges, District Mohali, Abhipur, Punjab, India. ∗∗ Indo Global Colleges, District Mohali, Abhipur, Punjab, India. ∗∗∗ Indo Global Colleges, District Mohali, Abhipur, Punjab, India.