Employee involvement benefits and limitations

There has been recent emphasis on 'employee involvement.' I can see the benefit of gaining employee trust and increasing employee engagement with involvement, but most managers avoid this due to decreases in efficiency and ability to make timely decisions.

What are your thoughts on employee involvement? In what types of situations should they be involved? It's obviously unreasonable, and sometimes inappropriate, for them to be involved in all decision making. Where should managers draw the line?