Beefing up listening competence

To state things clear, my current students rate high at the weekly transcription homework they are assigned. But transcription at home is different from real life. You listen once or more. If you are computer savvy, you can even cheat and use a slowdowning function in some audio software. But in the classroom, they have a very hard time deciphering on the spot the content we are working on for which they are not prepared, on purpose. Which raises the following question : listening/understanding is key to interpretation. How do you work on listening in the classroom? Is a "listening classroom" effective? I exhort them each week to listen and listen and listen, to read aloud, to do their bouts of shadowing outside the classroom, but inside, what is efficient?