'his personality is entirely unsuited to managing a group of people'

You don't understand what motivates people and, perhaps worse, what demotivates them.

Could it be that you're entirely unsuited to managing a group of people ?

(Though you came and asked what you were doing wrong - that's a good start .. I guess you're learning on the job. Perhaps you should let him do that)

'his personality is entirely unsuited to managing a group of people'

You don't understand what motivates people and, perhaps worse, what demotivates them.

Could it be that you're entirely unsuited to managing a group of people ?

(Though you came and asked what you were doing wrong - that's a good start .. I guess you're learning on the job. We all do that, some better than others)

If he isn't looking for extra money, nor the sort of people-management you offered him, perhaps he wanted 1) appreciation or 2) technical leadership.

The latter is often better separated from people management but gives responsibility and autonomy.

The former is a culture problem - perhaps your company acts as though being a manager is prestigious ? It isn't. The job of a manager is to allow the productive and creative people to work efficiently by relieving them of trivia and work efficiently on the jobs they were hired for. If they get all the praise, visibility and money, they're selling the company short.