Marietta,
I agree with you that employee retention impacts productivity. It also impacts employee morale when you have excessive turnover regardless of whether the turnover is voluntary or involuntary. If it is involuntary, continuing employees always worry about their own longevity within the company as well as that of others. Your point about continuing employees having to pick up extra work of those who have left is an important one as well. Since there is seldom additional pay for doing so, resentment tends to build. All in all, retaining employees is an appropriate goal.
Pat