The expression comes from the world of athletics. In high jump and pole-vault, when you clear a particular height, the horizontal bar is raised to a new level to see if you can jump even higher. Every time you clear the hurdle, the bar is raised, and you are set a new challenge. When you raise the bar for something, you raise the level; in other words, you set a higher standard.
Examples: The students went on strike because the Principal raised the bar for admission. *The CEO had to lower the bar in order to give his son the job