Just to add to John's comments which are absolutely correct. Are you trying to batch convert a colletion of jpeg files to a lower resolution? If you are trying to do this with photomanager, you are going to have to do it one file at a time. If you replace the exising file, then you will be left with a lower resolution picture that you may never get back to full resolution unless you have backed it up to another source. I cannot imagine why anyone would ever want to do that. If you are trying to save disc space, buy a external hard drive and move your photos there.
Photomanager is not a file or photo editing application, it is a file management application much like Picassa. If you just want to free up disc space, there are much better ways to do this than taking all of your photos and reducing their resolution.