Like this? (All the same queries, but modified with Null. This leaves Groucho out altogether).

create table staff(employee int primary key, employee_name varchar(10),

supervisor int null references staff (employee))

insert staff

values

(1, 'groucho', Null),

(2, 'chico', 1),

(3, 'harpo', 2),

(4, 'zeppo', 2),

(5, 'moe', 1),

(6, 'larry', 5),

(7, 'curly', 5),

(8, 'shemp', 5),

(9, 'joe', 8),

(10, 'curly joe', 9);

select chartdepth=1, employee=o2.employee, supervisor=o1.employee

into #org_chart

from staff o1 inner join staff o2 on (o1.employee=o2.supervisor)

where o1.supervisor is not null

insert into #org_chart

select distinct o1.chartdepth+1, o2.employee, o1.supervisor

from #org_chart o1 join #org_chart o2 on (o1.employee=o2.supervisor)

where o1.chartdepth=(select max(chartdepth) from #org_chart)

and o1.supervisor is not null

select s.employee_name, supervises='supervises', e.employee_name

from #org_chart o join staff s on (o.supervisor=s.employee)

inner join staff e on (o.employee=e.employee)

where o.supervisor<>o.employee