The stimulus implies that a manager's role is to "extract the best performance from employees." You have to read between the lines, but there's an implication that managers should try and "achieve" the "best possible performance" from their team -- in other words, an effective manager is a manager that has achieved the goal of maximizing his employees' performance.
Answer choice (C) describes a situation where a manager can be most effective in his role by relinquishing some control. This fits with the stimulus's statement that the best way for a manager to get top performance from his employees is to delegate responsibility to them.
Answer choice (B) isn't on point because it stretches the facts of the stimulus farther than we can reasonably take them. The stimulus tells us that employees perform best when they have responsibility for big decisions, not when they are chasing the promise of bonuses or job security. This increased responsibility is not the same as increased prestige -- it's described as "wanting to do a good job for its own sake." It's a bit of a stretch to equate the concepts of wanting to a good job for intrinsic reasons and wanting to achieve greater prestige. In any case, we don't have enough information from the stimulus to conclude that it's "often the case" that prestige is a bigger motivating factor than job security. We're given one example where employees may prefer responsibility to promises of job security. That's not enough to make a blanket statement about what's often the case.
Answer choice (E) isn't on point because it appears to conflict with the facts presented in the stimulus. Answer choice (E) says that businesses work best when they harness individuals' self-interest to benefit the company. However, the stimulus tells us that employees are most motivated not be bonuses or job security, but by responsibility over big decisions at work. An employee who seeks what's in their own best self-interest would be motivated by bonuses and promises of job security, but that's not what the stimulus describes. The stimulus says that employees should "want to do a good job for its own sake" -- not just for the financial rewards.
I hope this helps clarify things for you! Good luck studying.