In addition, 44% of those surveyed say their "companies are doing an effective job of responding to marketplace changes." Respondents say their companies accomplish this task primarily by focusing on efficiency.

"Curiously, employees are often more severe in their judgments about what needs doing than management," says John R. Stanek, ISR president and chief executive officer. "Staff cuts, plant closings, outsourcing and other actions are often greeted positively by the surviving workforce, who admit to feeling terrible on one level -- until they consider the alternative. Their immediate concern becomes, as painful as these moves have been, are we doing enough to save the enterprise?"

As resources are cut, employees, facing the realization that they could be next, begin to become more productive. But what seems to bother employees most is not being asked by management, "What can be done now?" The survey points out that the best performing firms practice two-way communication, even when the news is dismal. The best firms ensure that employees know where the company is headed and how management plans to get there.

The survey also lists points on what management should do to make an immediate impact:

• Start building solid credibility as soon as a problem arises
  
• Tell employees where the company is headed and ensure they understand what it means to them
  
• Ask employees what they think.