this is based on OADP configurations. You can change the OADP configurations for displaying the employees. But if your planning to add another option in that drop down list, then entire view you have to design and integrate in this view i.e details display based on selection of the option from dropdown.
Check the SPRO nodes configurations of Manager Self-Service ->Object and Data Provider -> Object Provider and Data Provider
For this view name is MSS_LCA_EE
For this you have to do changes in OADP configurations for view MSS_LCA_EE - CATS: Employee Selection.
since those two drop down values are mapped to this view for selecting the records.
Check the table V_PTREQ_TEAM - Select Employees for Approval
In this view MSS_LCA_EE is mapped for Cats Approval
This view MSS_LCA_EE is defined in table V_TWPC_ORGVWGRP, for this MSS_LCA_EE view there are two organizational views are grouped in this table
These two organizational view are defined in table V_TWPC_ORGVW
MSS_LCA_EE_ALL All Employees
MSS_LCA_EE_DIR Directly Subordinate Employees
The selection rules are defined in table V_TWPC_OBJSEL
MSS_LCA_EE_ALL All Employees
MSS_LCA_EE_DIR CATS: Direct Reports
For above selection rules there below are the selection object rules mapped
MSS_CAN_RULE1 Object Selection for Root Objects
MSS_CAN_RULE2 Object Selection for RequisitionRequests
MSS_CAN_RULE3 Object Selection for Valuation Forms
MSS_CAN_RULE4 Object Selection for Candidates
MSS_CAN_RULE5 Object Selection for Candidates
These selection object rules are defined in table V_TWPC_OBJSELRUL.
If you want change or add any new view you have to do all above configurations.