Wouldnt that just skew all grades higher? Why wouldnt I want to give out all A's to my B and C students if it meant hire pay? Or am I missing something
You're not missing something. You just spot it quickly because the idea of metric-based performance pay has been such a disaster in the technology industry (pay extra for devs not to "make bugs", and they simply stop filing bugs in the bug database).
You don't have to do that, just assess them at a lower level at the start of the course!