Hi Vasu
The "manager" attribute for each direct report should be populated with the unique id of the manager in the IM user store. Make sure that you only store the unique id, and not the full DN of the manager.
Then set up an admin role for "Supervisor" (or whatever you want to call it) and give it the tasks to modify users. Scope the role membership as per screenshot (in this example, the unique id is called "PRID" - by default it is called "User ID") so that the member can only manage those users who have his unique id in their "manager" attribute.
Assign this role to all supervisors.
Regards
Pearse