There is no doubt that higher grades make students happier, so they complain less, which makes administrators happy, who then hand out rewards accordingly. One effect of caving in to these pressures is the ever-increasing grade spiral, fed both by the students and those who recruit them. Yes, it is easier to get a job if you have high grades. Companies will then demand an A average, etc. When we give A's for mediocre performance, and C's for unsatisfactory performance, we are lying through our teeth.
Teaching is one of the most complex human endeavours imaginable.