I don't think you can avoid a design that does that through the database design, if only because somehting has to go in first.. It does, however, account for the fact that the relationship between Dept and Employee is 1-M, but the relationship between Dept and Manager is 1-1. They can't therefore be in the same entity.

Here is one possibity you might try: create a view with only the managers. Relate the Dept table to the view rather than back at the table. I only rarely use views, but this might be worth an attempt. If you try this, I'd be interested in finding out the result.