I would definitely reward grades, because school is, in effect, his most important job, right now. I also pay mine for doing things that I would pay someone else to do. Regular household chores are expected of anyone who enjoys the benefits of living in the house. Also, when he has his eye on a big ticket item (iphone) I can usually find a big job for him, (really cleaning out whole garage, waxing all the floors, etc.) so that he's not just getting whatever he wants, when he wants it, for nothing.
If he has to work a regular job, in addition to school and extracurricular activities, you will not get to spend much time with him, and he won't be around much longer... Sigh...
I never had an "allowance," but I was given a gas card and didn't have to pay for anything. I mowed lawns for spending money. I was involved with sports year round in high school so I never had time for a job.
Definitey didn't get paid for grades. Good grades were expected, not rewarded.