Earning a C in the workplace is every bit as bad, if not worse, as earning one in the academic setting. The C grade is simply saying that a person has an average grasp of a concept or has done an average job completing a task. There is a reason C students don't receive accolades and scholarships. There is also a reason that receiving an average review in the workplace isn't as likely to lead to a promotion or significant increase in pay. Doing an average job just does not set a person apart from the rest of the crowd.
One can make the case for doing what is expected and leaving it at that. If you want to cultivate a trend of mediocrity, then by all means, accept an average job. Most people would prefer their employees strive for a job well done. When employees do the bare minimum, the equivalent of a C, a company cannot expect to grow and prosper. Doing an average job is just one step above stagnation. It does nothing to foster forward momentum.
Industries are getting more and more competitive as time goes by. Doing an average job in the workplace is simply not going to cut it if a company wants to keep ahead of the game. There is a kind of "survival of the fittest" when it comes to staying afloat in the long term. Companies need employees who will put in the time and effort to distinguish themselves in the fields they have chosen. It is by having employees who do an above-average job that a company will be a leader in its industry and remain profitable and stable.
Doing what is expected with respect to your job position is a given. An employee has a job that he or she must perform each day. Should that job not be completed, they are free to be let go for not holding up their end of the deal. It seems to be a simple concept on the surface. A job gets done so that an employee gets paid. If it were that simple on a larger scale, then a C rating would be good enough.
Things are not quite that simple, though. When a job posting for a promotion comes up, those who go above and beyond and those who simply do the minimum must vie for an elevation in their position. It is not hard to imagine who will be the likely candidates for the job in question. Any employer interested in maintaining a high-functioning organization will evaluate a group of candidates and select the person most likely to get the best results. An employer who selects an average performer over a more qualified candidate would be seen to have questionable reasoning.
Getting a C in school may be good enough to get you to the next level of coursework, but getting a C in the workplace is only good enough to keep you where you are indefinitely.