Sean
If I understand your question, I think you can see those users but not edit or make changes to them. If you want a different mechanism (perhaps managers can only see employees that they manage) you'll need to build that in you app. Best practice for that is to create a specialization for administration.account in one of your modules and then build the security structure you need. When doing this, the user role level restrictions still apply, so you'll have a couple of layers of security.
Hope that helps,
Mike