Supplier Type: Employee is not showing in LOV when we query a Supplier

We have upgraded from R11i to R12.1.3

We have HRMS and Payroll installed and configured.

In Payables, when we create a new Supplier, Oracle presents us the below 2 options in the LOV.

1.Standard Supplier

2.Supplier used to process expense payment to internal employees.

But in our Business process we have some Supplier Type: Contractor which we have to be change to Supplier Type: Employee. So in R11i we generally change Supplier Type from Contractor to Employee. 

Also we have value "Employee" present in the VENDOR TYPE lookup.

Scenario 1: When we query an employee in the Payables > Suppliers form, This employee shows the