discretionary bonus

1. "Writing" does not mean in manuscript/hand writing as opposed to typed. It means written/in writing as opposed to spoken/orally. 2. I don't know what you mean - discretionary means that there is choice or judgment. If a sales manager is entitled to a bonus for achieving a sales target, he must be paid it if he achieves the target. The directors cannot exercise any discretion and not pay him. A bonus to a workforce might be discretionary depending on the overall performance of the company as measured by a number of factors (which would be documented) and it is for the directors to decide to what extent performance has been achieved. It might be that they will still pay a bonus (at their discretion) even though performance has fallen short in some area. 3. It's about accountability and responsibility - directors have duties and responsibilities in law. As the answer indicates, if talking about a significant bonus, the board collectively would agree the bonus.

Any "company policy" - whether "accounting policy" or "recruitment policy" or "remuneration policy" - must come from the board of directors (otherwise it's not a company policy). Per the scenario there is no mention of a written policy. Whether the production supervisor or the production director "formulates" how the bonus is to be determined it still needs a written policy (to be used as a basis). With a written policy in place, the production director will be sufficiently senior that he could formulate a policy that does not need to revert to the board for further approval, but the supervisor does not have that level of authority. OK - so maybe the supervisor drafts the policy for the director, but you're just complicating the issue.