This sounds pretty standard to me. It's usual for large companies to have a policy of a maximum of 10% raise, and it's also true that raising the salary of a team member usually begs the question of why the other team members' salaries are not raised as well. I.e. your performance would have to be higher, and the manager has to be able to demonstrate that to HR. Also, accepting counter offers is widely considered to be a bad move. And, from the manager's point-of-view, to have an employee fishing for a raise by threatening to leave is a bad sign too. It's usual for the manager to call the bluff in order to not encourage other team members to do the same. And usually the employee will be dissatisfied again soon.
