Is it "normal" to pay you only enough to keep you from leaving? Yup! Even though that's not your question, that's what "normal" is, in my experience, in the US.
I worked at one place, where, after a year in one department, I'd transferred to a new area. At my first review in that new area, my boss said, "this is all we're paying you? I've got to fix that!" and he did. I got a 20-30% raise out of it and was incredibly appreciative!
At my current job, I went 2 years without a raise because I'd exceeded the top of the pay range for my job title, and my boss and HR were working to find a new job title that didn't require me switching departments (all the people at the next level of the same title work in a centralized area and neither my boss nor I wanted me to move there), and a title that was similar enough to what I actually do and had enough pay range head room to make the switch worthwhile. I did get a reasonable bonus each of the review years that went by without a raise, so it eased the pain a bit, but it wasn't fun. We finally managed to find a new title for me and I got a raise at my last review. Of course, the base on which the raise was based was 2 years old, and no special accommodation was made for that, but it was better than being stuck for another year. (I also note that this is just one of the many reasons I put so little stock in job titles, but that's a totally different question...)
TL;DR: If you believe your boss is actively making a good faith effort to work with HR to find a way to give you a raise to get you to where you feel you should be and you like the job, ride it out. If you think he (HR) is just blowing smoke, freshen up the resume and get hunting.