This paper examined three different aspects of the relationship between leadership and employee satisfaction and performance. First, it tested the hypothesis predicting that vertical and lateral leadership dimensions of supervisors would be positively associated with employee performance and satisfaction. Second, it investigated, in an exploratory fashion, the relationships between lateral and ... [Show full abstract] vertical leadership of a manager and performance and satisfaction criteria of his subordinates one level removed. Third, for both managerial levels, it examined the extent to which lateral and vertical leadership were unique predictors of the criteria. Our findings support the proposition that the Lateral Orientation of a leader is an important aspect of leadership. Though the vertical dimension of Consideration was by far the most consistent predictor, the lateral dimension should not be overlooked. It extracted unique variance for employee satisfaction criteria when another vertical dimension (Initiating Structure) did not. Although the pattern of significant relationships was similar for both managerial levels, there was one important difference. The Lateral Orientation of second-level managers was negatively and significantly correlated with employee performance when the effects of second-level Consideration were partialled out. This is not consistent with the theoretical arguments presented in the development of the dimension.  This study raises more questions than it attempts to resolve. More extensive re-search might be directed toward further investigation of lateral aspects of leadership in general and the relative impact of such a dimension by organizational level. Certainly the negative relationship between individual performance and Lateral Orientation coupled with a positive and significant relationship with satisfaction criteria deserves some attention. This is particularly interesting since this relationship holds for second-level supervisors with employee criteria only when the effects of Consideration are partialled out. At the very least, this study seems to suggest that the lateral aspects of leadership are likely to be an important area for study in addition to the more traditionally considered vertical leadership aspects.