That definately is a weird response, IMO. While I understand that raises are a privledge and not a right, I too would have questions. I wouldn't want to perform my best if I knew that I would not receive anything out of it. If I were in that situation, I would take advantage of the cross-training, simply so I could place that on my resume. Then, I would be floating my resume to other companies with hopes for a better offer. Actually, that's kind-of what I did at my old job!
Good luck!