Use 'discretionary' when highlighting a choice depends on someone's own decision. The company allows discretionary work-from-home days.
Pro Tip 2/3
Authority's Decision
'Discretionary' implies someone in power has flexibility to decide differently in each case. The board has discretionary authority over funding approvals.
Pro Tip 3/3
Not Automatic
'Discretionary' means actions are not set by rules, but by individual judgment. Bonuses this year will be discretionary based on performance.