According to the ArcGIS Desktop Help, the only way to add personal database logins is through the WFM Administrator:
"If you would like each of your Workflow Manager users to connect to the spatial data with separate logins, choose the Each Workflow Manager user will connect with their own database login option."
Adding data workspace connections using the Workflow Manager Administrator—Help | ArcGIS Desktop
However, the responsible administrator needs to enter the username/password credentials.
In general it is not desirable that administrators are handle personal passwords in such a way.
My question: is it possible to set up individual Data Workspace credentials in a more secure way? For example by letting end-users enter their passwords themselves through the WFM application?
Users can actually set their individual login password in the client app, it just isn't very obvious to find.
Open the client app->Click Edit->Set Database Login
They will then be prompted to select which data workspace they would like to define credentials for as an individual login.
There should be no need for them to have to provide the Administrator with credentials to use.