Nowhere in management is it required that you find the personality of every one of your employees to be charming, endearing, or magnetic. There are plenty of managers who describe some of their best employees as being terrific on the job, while adding that there is no way they could be friends. This is not a problem; it's just a fact.
Your job as a manager is not to be concerned about whether you and this employee have what it takes to become buddies. It makes far more sense to be concerned about his motivation, productivity, and overall performance on the job.
At the same time, it is important to be aware of the fact that your dislike for his personality can start to spill over and contaminate your view of his work. If you continue to focus on the aspects of his personality that grate on you, it will just be a matter of time before aspects of his job performance will grate on you too. In fact, this may be happening already as evidenced by your statement that he is doing a "decent" job. You specifically did not say that he is doing a good job -- "decent" implies that you have some concern about his work. Is it based on performance or personality?
It may be helpful for you to step back and try to figure out why his personality annoys you. There is no quick formula to use, but there are a few tracks to follow. For example, perhaps he reminds you of someone you disliked from years gone by; perhaps his personality is closer to yours than you care to admit; perhaps he conflicts with some of your stereotypes; or, perhaps you feel that he is a threat to your job security. The point is that if you can get a better focus on why he annoys you, your chances of working effectively with him increase dramatically.
It is also important to remember that your best employees need not be your best friends. In fact, you may have more problems if they are.
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