A formalism is developed and predictions are made for selected polarization observables in one-nucleon knockout reactions within the transfer-to-the-continuum direct reaction model. The effects of nucleon-target spin-orbit distortions are also included and their importance is quantified. The calculated knockout reaction analyzing powers reach an appreciable fraction of their maximum allowed values. They are also found to be quite sensitive to the different approximation schemes used for the transfer probability amplitude within the transfer-to-the-continuum model. In contrast, they are shown to be insensitive to details of the two-body interactions assumed, including the nucleon-target spin-orbit interaction. The angular distributions of γ -rays, arising from the decay of heavy reaction residues produced in excited final states, are shown to be strongly anisotropic.