Ok, to be sure I understand this correctly, you have Direct Reports configured as described here: http://helpnet.flexerasoftware.com/appportal2015r2sp4/default.htm#helplibrary/AP_ROBOptions.htm. This feature works by using the Manager field in AD, which is synchronized with App Portal. From your description, it sounds like the Manager field in AD is configured to this manager for each of the 12 employees. Is the behavior that the manager can only select 4 users at a time (doesn't matter which 4), or that only 4 are working?
If the behavior is that only 4 of the users are working, it sounds like one of two causes: (1) the user import data has not collected the Manager field for the other users; (2) the users are not included in the licensed collection (or are in the excluded license collection). Version 2013 does not have a useful feature to view the imported user and device data (that is available in a later release). So you will have to check the user table in the App Portal database to determine whether or not the Manager field populated for the 8 users. You can also check the licensed and excluded collection membership to identify whether or not the user's (or user's devices) are excluded from licensing.