The aim of this paper is to improve understanding about how district health managers perceive and use their decision space for human resource management (HRM) and how this compares with national policies and regulatory frameworks governing HRM. The study builds upon work undertaken by PERFORM Research Consortium in Uganda using action-research to strengthen human resources management in the health sector. To assess the decision space that managers have in six areas of HRM (e.g. policy, planning, remuneration and incentives, performance management, education and information) the study compares the roles allocated by Uganda's policy and regulatory frameworks with the actual room for decision-making that district health managers perceive that they have. Results show that in some areas District Health Management Team (DHMT) members make decisions beyond their conferred authority while in others they do not use all the space allocated by policy. DHMT members operate close to the boundaries defined by public policy in planning, remuneration and incentives, policy and performance management. However, they make decisions beyond their conferred authority in the area of information and do not use all the space allocated by policy in the area of education. DHMTs' decision-making capacity to manage their workforce is influenced by their own perceived authority and sometimes it is constrained by decisions made at higher levels. We can conclude that decentralization, to improve workforce performance, needs to devolve power further down from district authorities onto district health managers. DHMTs need not only more power and authority to make decisions about their workforce but also more control over resources to be able to implement these decisions.