I object to calling it “paying for grades”. It’s more like “rewarding good grades”. Just as real professions and the real world, the harder you work the more you are rewarded. The amounts the OP posted aren’t too extreme.
That said, I also believe the child should have to work a part-time summer job (golf caddy, fastfood, bagger, whatever) once they hit 16. They’ll understand and appreciate the work ethic.