The article deals with current issues of democratization of working life in the developed world and in the Russian Federation. The democratization process is regarded as the most important condition for the mobilization of labor potential of the staff of foreign companies and Russian companies, as a means of increasing employment and innovation activity of workers. We investigate two major democratization of working life — to attract employees to participate in the ownership of capital companies and to attract them to participate in the management of production relations. Giving employees ownership of capital is considered by the example of a widespread system of ESOP in the US, as well as various systems of worker participation in the ownership of the means of production in Western European countries: Germany, France, UK, Denmark, Spain, Italy and others. Showing a means of strengthening workers incentives: giving them shares, dividends accruing on them, depending on years of service and salary increase in pension insurance, etc. Engaging employees to participate in the management of production is considered the example of some Western European countries and in the whole European Union. The basic model of employee participation on the example of French firms, the UK, Denmark, Germany and other countries. Experience the democratization of working life in the Russian Federation considered at the example of a closed joint-stock companies of workers (people’s enterprises). It is only in the Russian economy the legal form of enterprises, which actually solves the underlying socio-economic problem — to overcome the alienation of labor on the basis of employee participation in ownership of the means of production and management relations. Experience clearly shows people’s enterprises competitiveness and compliance with the Russian mentality. In essence, they are the only form of industrial democracy in the Russian economy. However, people’s enterprises do not find any support in the business, nor the state.