Since with engineers you rely on them estimate how long things will take, and the last thing you want to do is keep nagging them to decrease that time, it's easy for engineers in a non-startup company to lose the sense of "urgency" and get complacent with the estimates, adding buffers to make sure they are never late. How would you try to keep ever increasing estimates?
Ultimately, you have to work with people you can trust. If they trust that you won't suddenly spring some bad surprise on them, and if you trust that they won't artificially pad their estimates and slack off (which is very unlikely unless you're working with some really bad apples), there shouldn't be a problem of padded estimates.
