It's not all 100% workable, but it's no joke. The desire for dominance runs strong in normal humans. Normally schools just let this run wild, like Lord of the Flies, causing all sorts of horrible social interaction for no gain. The dominance urge isn't going away, so we might as well harness that urge for education.

Agreements can be made to extend incentives beyond the school:

Good GPA? You can drive a car at age 14, with reduced-rate insurance and school-provided training. Bad GPA? You must wait until age 25.

Good GPA? The local cops welcome you to go shooting with them. You get any needed state licensing at age 12. Bad GPA? Forget it; no 2nd amendment for you!

Good GPA? The local mall welcomes you by yourself. Bad GPA? You are not permitted entry. (Moderate GPA: only with parents)

Good GPA? Public transportation is free. Bad GPA? You don't ride without a parent. (Moderate GPA: standard fare applies)

Good GPA? Wander the city as you please. Bad GPA? There is a curfew.