What is definition of"Discarded"?
Discarded shares are shares your miner did find after the pool already announced a new block. So the miner software doesn't even bother to submit it (because it would get rejected).
What do I need to do to improve hash rates and reduce discards?
Hard to say, it could be from bad mining software as os2sam said, a slow and lossy network, mining on diff port with too high difficulty to name just a few.
Any impact to my profitability and hash rates, when "Discarded" value is high (currently x2 or x3 of Accepted value)?
Pools only pay for accepted shares, so yes, more accepted shares - more payout.
HTH