Hi RamkumarVTR,

sounds like you plan on using Test_manager__c. So as mentioned, use the script to update the current data (should absolutely do this in a sandbox first and verify it is what you want).

You should update the query to use the correct fields, and then update the for-loop:

Note that if the test_manager__c user is inactive it might create problems, so here is some updated code: 

List<User> updatedUsers = new List<User>();
Set<Id> managerIds = new Set<Id>();
List<User> myUsers = [SELECT Id, ManagerId, Test_Manager__c
                      FROM User
                      WHERE isActive = true];

// Gather Test_Manager__c ids so we can make a query to get the Active value
for (User myUser: myUsers) {
  if (myUser.Test_Manager__c != null) {
    managerIds.add(myUser.Test_Manager__c);
  }
}
Map<Id, User> managers = new Map<Id, User>([SELECT Id, isActive FROM User WHERE Id in: managerIds]);

// looping through active users and checking if the target field is blank. If so, we will copy the Test_Manager__c value to it
for (User myUser: myUsers) {
  if (   managers.get(myUser.Test_Manager__c) != null 
      && managers.get(myUser.Test_Manager__c).isActive == true) {
    myUser.ManagerId = myUser.Test_Manager__c;
    updatedUsers.add(myUser);
  }
}
update updatedUsers;

Digamberlucky, the workflow field update on user object does not allow for a formula on the manager field.

So you will need a trigger to perform this update. Here again, you might want to check if Test_Manager__c is the Id of an active user:

trigger UserTrigger on User(before insert, before update) {
  if (trigger.isInsert || trigger.isUpdate) { 
    for (User myUser: Trigger.New) {
      myUser.ManagerId = myUser.Test_Manager__c;
    }
  }
}

Please try in your sandbox and let us know if it helps