Bonuses issued on the basis of a performance review are probably discretionary.
In certain fields, such as law and finance, bonuses are a common way of rewarding employees for a job well done, as well as providing incentive to motivate people to work harder and increase productivity. Bonuses may be determined by company policy, mathematical formula or some other non-discretionary method, or they may be left to the discretion of managers. You can distinguish between discretionary and non-discretionary bonuses.
Instructions
1. Find out if there is a mathematical determinant at work in setting the bonus; for example, a designated percentage of sales. This would be a non-discretionary bonus.
2. Review your contract or work agreement for references to a bonus. If the bonus is a term of the employment contract, it is non-discretionary.
3. Consider whether or not the bonus is expected or announced ahead of time. Discretionary bonuses tend to be surprise bonuses, in that the employee is neither notified ahead of time or expects to receive in.
4. Compare your own performance at work to those of your colleagues and see who did or did not receive a bonus. If employees of comparable levels of performance and competence received bonuses were not given bonuses in a uniform manner, it suggests the bonuses were discretionary.
5. Evaluate whether a bonus was given to make up for low performance pay. Although this may seem counterintuitive, managers sometimes offer employees discretionary bonuses to help compensate for disappointing performance or merit-based bonuses in order to keep up morale.
