The situation you are describing is not a problem in name only. Your boss is being insensitive to the needs of his employees on an issue of real importance to them.
He may be a very good boss, but his failure to respond to your concerns in this area sends a message of disrespect and disinterest, and this can undercut his overall effectiveness. After all, joking about a person's name can easily be interpreted as joking about his or her culture, values, and personal identity.
Your boss does not seem to understand the importance of this issue to you, and he obviously needs a little more education in this area. As part of this discussion, instead of just telling him how to pronounce the employees' names, try to do so in a way that helps him actually learn. For example, perhaps he may learn the names more effectively if you give him a sheet with the correct phonetic pronunciations, or perhaps an audiotape with the correct pronunciations would help.
Taking these kinds of steps will help your manager understand that butchering employees' names is not all that different from name-calling.
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