What do you do when your kid gets bad grades?

My son is not passing school even though everyone knows that he is smart enough, he just donesn't want to apply his self. How can I change that?What do you do when your kid gets bad grades?For every grade D or lower they get grounded for a week, I get online and find extra work for them to do in the subject they are failing. I keep on the extra work until I see the grade come up at least 1 grade. And when they are grounded they get nothing except school, homework, breakfast, lunch, dinner, and a beverage. NOTHING ELSE....but thats me. Hope it helps....