Actually, I almost never keep the recursive relationship in the same entity but almost always create a new one.
One of the advantages of creating a new entity is that, I think, the design is cleaner. The employee entity only talks about employees. While the manager entity talks about managers and their employees. Also, I never need to have a null value for manager_id when the employee is at the top of the hierarchy. The manager at the top of the hierarchy is just as easily identified in either case.
Keeping the manager relationship in a new entity also has the advantage that you can add other attributes to this entity such as start_date and end_date. In real life, an employees manager can change. If so, the single table version loses historical information.
Of course, it depends upon the requirements of your work.
The advantages that I see in creating two entities far outweigh limitations, if any.
Ravi