Network coding, which works in the network layer, is an effective technology to improve the throughput of two-way relay networks. In this paper, we compare the existing network coding schemes: traditional network coding (NC) scheme, physical-layer network coding (PNC) scheme and soft network coding (SNC) scheme, and propose a new physical layer scheme which can be seen as the implementation of network coding in two-way relay networks. Relay nodes combine the received signals from two source nodes before demodulation and channel decoding. The computational complexity and BER performance of the proposed scheme are analyzed compared with the previous schemes. Theoretical analysis show that the proposed scheme can save 50% computational cost of demodulation and channel decoding processes compared with NC scheme, meanwhile increase the power efficiency of the relay nodes in two-way relay networks significantly. Future works with the proposed scheme are also discussed.