The purpose of this article is to examin Hersey and Blanchard's situational leadership theory. This theory is widely known and used, but has limited, mixed empirical validation. This study examins the underyling assumptions regarding the theory's prescriptions that subordinate readiness moderates the relationships of leadership behaviors with indicants of subordinate morale. This study also considered subordinate hierarchical level of organization. Questionnaire survey was conducted using 72 pairs of workers at a local public entity. Results of this analysis support these assumptions when leadership scales of participation and deligation are used. But the results do not support these assumptions when PM leadership scale is used. Findings are discussed in terms of future research and theory development.