The term 'industrial democracy' refers to the structures and institutional mechanisms that give workers or their representatives the opportunity to influence organizational decision making in their places of employment. Programmes vary in the amount of involvement they allow workers in the decision-making process and the degree of influence workers have over decision outcomes. There has been some debate over whether mere worker involvement, or participation, in decision making was a sufficient condition for industrial democracy, or whether joint decision making, or power sharing, between workers and management was necessary before one could speak of democracy in the workplace. There is, in practice, a large range of programmes and institutions that enable labour's voice to be heard in a formal way within the enterprise. These differ in the scope of decisions they include, the amount of power workers can exercise vis-à-vis management, and the organizational level at which the decisions are made. Some are purposefully designed to give workers a very modest role in decision making while others are intended to give the workforce a substantial amount of power in organizational governance.

Industrial democracy, or worker participation in management as it is usually called in the USA, can be direct or indirect (through representatives), and prescribed by law, established through contracts or granted by the employer. It is convenient to place the different models or forms of participation in two categories based on their origins - legal statutes and employer grants. Legally based or prescribed structures such as worker representation on corporate boards of directors, works councils or trade union representation (collective bargaining) are formal systems with written rules and regulations that provide uniform guidelines for involving workers in decision making in all organizations that come under the jurisdiction of the law or contract. Employer-granted or employer- initiated participation usually does not specify employees' legal rights to be involved in decision making. To the extent that formal written agreements exist in granted programmes, they are specific to a given enterprise. Examples of granted participation are shop floor employee involvement programmes, labour-management committees, like those found in productivity gainsharing plans, and autonomous work teams.

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