Retention policies?

I have decided to read the article called, School Isn't Like a Job by John Scammell.  I read both articles that Dean gave us to choose from but I decided to blog about this one because last semester I did a presentation on retention policies and their effects on students.  This article reminded me of the points I brought up in that presentation.  In this article it talks about giving students a zero on assignments if they haven't completed them, the point that Scammell makes is that school is not like a job, student's are not getting rewarded with money and it just matters if they have learned the material or not.  If not, I don't think its a matter of how low of a grade you should give but more of a question, how do I rework this so this student can get something out of it.  Many people are thinking the opposite, if the student doesn't do the work their grade should reflect it.  I just feel that you should give a student the grade that represents their knowledge of the material and I need to give students the opportunity to show me what they know.  After reading some of the comments I have mixed emotions on the topic, there was one comment in particular by Tom Berriman saying that it teaches students a "why try mentality" when giving them a higher mark if they fail a test.  I do agree but I feel it's more complicated than that.  I don't believe in giving zeros out all the time, but I do feel that if you have given the student multiple opportunities to show you they know the material and they don't deliver I think their grade needs to reflect that.  I really do feel it's a complicated decision that needs to be made different situations.
I feel that giving a zero is more than just a zero, the research I found while doing my presentation last semester showed the negative effects on retaining a student.  This article gives a perspective that I had not thought of before.  Retaining a student has really negative effects on them, including their self esteem, future learning and even drop out rates.  I know it may seem like a zero is just a zero and it's no where near holding a student back but I think it could have some of the same effects.  It may not, it probably depends on the student but I want to try my best to not give a student a zero.