Which term describes bonuses that are discretionary?

• A. Non-discretionary bonus
• B. Discretionary bonus
• C. Signing bonus
• D. Cash bonus

Answer: (B)

Discretionary bonuses are payments whose payment is at the employer’s discretion, meaning there is no guaranteed promise to pay and no predetermined amount. They’re typically awarded for factors like individual performance or overall company results, and the amount (or even the decision to pay) can vary from year to year. This contrasts with non-discretionary bonuses, which are contractually promised or expected regardless of performance. A signing bonus is a one-time incentive to join the company, not a recurring or discretionary performance reward, and a cash bonus simply describes the form of payment rather than the employer’s discretion. Therefore, the term describing bonuses that are discretionary is discretionary bonus.