What is Win-Win

A low-level equilibrium exists between low investment among employers and low loyalty among employees in private enterprises, and this is because enterprises follow the laws of the market and wait for changes in labor relations. On the basis of theoretical analysis, this paper establishes a process model to achieve high-level equilibrium between employees and employers and win–win situations. First, enterprises should follow social-exchange laws and create their management philosophies accordingly, in addition to exploring collective targets set including their interaction paths. Second, enterprises should be active and take the first step to improve labor relations through a participative style of management. The ensuing change in employee cognition leads to positive organizational behavior and positive interactions, with the realization of mutual benefit and win–win situations as possible final results. Democratic participative management is a necessary condition for the creation of win–win situations, which can effectively avoid the disequilibrium of high employer investment and low employee loyalty that contributes to labor shortages in China.