I agree that micromanagement (especially of employees whose job is creating things) is a really bad idea. If it's necessary, then you made a bad hiring choice and need to start looking again.

However, if a developer came in "high and wearing a chicken suit" I wouldn't care how much he got done. The chicken suit might be passable if it were casual Friday, but high - not acceptable. There should still be an element of professionalism and respect when you're working with other people, getting paid well, and clients are depending on you.