Your manager has a pet, and you have a pet peeve. When a co-worker is doing virtually no work and yet is granted the most favored employee status, your options as a non-pet are rather limited.
You have already taken the two most important steps, namely approaching the pet and your manager. The fact that you were ignored by both is quite telling. Your associate appears to have no concern for you and the rest of the team, and she most likely figures that her relationship with the manager gives her all the social interaction she needs, along with a dose of power. And, your manager's lack of follow-up when you advised him of the situation indicates that his work priorities seem to be rather muddled as well.
At this point, you need to decide how much you are going to let this situation bother you. If you and the rest of the team get along well and are able to work productively and sense a good deal of achievement and growth, then perhaps you should just ignore the pet and her master.
Your other option is to approach senior management. Topsiders are typically interested in correcting situations that interfere with employee satisfaction and productivity. Such topsiders are often concerned that pet situations can lead to exposure and various claims of inequitable treatment, particularly by non-pets and former pets.
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