A manager who tells his employee that he is "flat-out wrong" is usually flat-out wrong. A more productive managerial response is to discuss your points.
However, if you simply said to him that his thoughts are an oversimplification, your comments may have been perceived as an attack. If you disagree with your manager on this type of issue, you can increase the likelihood of a discussion rather than a brush-off by starting with a question rather than an answer.
As for your manager's thoughts about recognition, he is correct, but only to a point. Recognition is motivational at work, providing that other basic work elements are perceived as fair and adequate, such as the pay, working conditions, and benefits. For example, if the pay is perceived as inequitable, all the recognition in the world is not going to have much of a motivational impact.
However, once the basic elements such as pay are taken care of, then recognition can play an important motivational role, as can advancement, responsibility, achievement, and the work itself. Your manager needs to recognize that there is more to motivation than recognition.
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