Yep, Buicanddeere said it, you should have 4 conductors running from generator to transfer switch/main panel, 2 hot legs, Neutral and Ground(typically Red, Black, White and Green in a 4 conductor cable). Just like the commercial service feeding your house, Ground and neutral should be hardwired into the panel, and NEVER switched. Only the hot legs run thru the switched contactors.
It is also very important that the neutral leg to the generator never be interrupted. If you still have a neutral interconnect in your panel, but loose the neutral reference from the generator, you can run into issues where two devices plugged into different outlets, each outlet on separate 120V legs from the generator, can act like two 120V devices in series on a 240V circuit. This can be rather unhealthy for the appliances, as well as the people around them. Ground is tied to neutral at several points on the commercial circuit after it leaves the final stepdown transformer that provides your service, as well as where it enters your panel, so you get two shots at maintaing this important neutral reference pathway.
Ron