Reviews the Postal Service's (USPS) efforts to improve employee working conditions and the overall performance of the USPS since the 1994 report which identified persistent labor-management relations problems and recommended improvements. Determines the status and results of the USPS's progress in implementing 10 specific recommendations and identifies approaches that could help the USPS and its unions and management assoc. achieve consensus on how to deal with these problems. Appendices include a description of the grievance/arbitration process and comments from USPS management assoc. and labor unions and assoc.