When using the "Manager" property in Project Server, workflows display errors and fail to run.
As a workaround, find another user who is not the initiator of the workflow, and then use the Query LDAP action to get the manager.
This is a limitation of the way workflows are run in Project Server. Workflows run in the context of the System Account (SHAREPOINT\system). Nintex uses SharePoint's functionality to determine the manager. The code which retrieves the manager is unable to resolve "SHAREPOINT\system" correctly.