You can click the + Assign button to assign employees to their respective roles. In the screen below, Peter, Alice, and Kathy are all employees. In Kathy's related list, you will see that Alice is the subordinate and Peter the manager.
How to create the self-referencing lookup field?
The related module drop-down in the multi-select lookup field will now display the name of the same module where you are creating the field.
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