Sounds like management needs to reduce friction in order to improve efficiency. There is no argument that it is more efficient to lose a successful employee who already knows your business and hire a new one who does not.
A good system would be to always grant the retention raise when presented with a competing offer (without all this work you described), with a short window of time to allow for someone up the chain to veto.
The problem here is the competing offer. By the time someone has gone through the work to obtain an offer elsewhere they have already mentally decided they are making the move. It also poisons the well a bit in terms of recruiting/interviewing as offers come late in that process so if they are being done to farm offers to present for a counter-offer that is likely also happening to your pipeline for other companies, this is bad for everyone.
Retention has to be pre-meditated, you need to identify the market is moving and factor that into your budget. You are -already- doing this in the current system by accounting for market rates to cover attrition. So instead of -having- attrition just pay the retention raises and cut out the middleman and the disruption.
Agreed, let me restate. The least they can do is match / beat a competing offer without reams of paperwork. But you're right, they need to do more than that.
A good system would be to always grant the retention raise when presented with a competing offer (without all this work you described), with a short window of time to allow for someone up the chain to veto.