Essentially it is a way for the company to allow some variability in your income, in case of an especially good or, more typically, bad year, as well as hinder turnover by withholding a large portion of your compensation until after, typically, the last fiscal quarter of the year. It's discretionary of course so the company isn't on the hook for it and called a "bonus" as if they are paying you beyond what your work is worth. You generally will not have any insight into how your bonus is calculated nor will you be given any idea how to move that number in a positive direction. That was my experience with the bonus pools in the financial industry anyway.