All managers need to decide how much latitude to give their employees. On one hand, micromanagement is demeaning and frustrating to capable employees. On the other, your job as a supervisor is to give your direct reports the support they need.
To determine if you’re giving employees enough latitude, ask them what decisions they feel they could make, but are not allowed to. Then, remove what impedes their ability to make those decisions, if appropriate. Make sure to communicate the boundaries. Clearly define what employees can and cannot do, or identify a core set of required standards. As long as those standards are met, people can have freedom to do what it takes to do their jobs.
Adapted from the Harvard ManageMentor Online Module: Customer Focus.