Illustrative case study /role play on TNA, which can be used for teaching TNA?

xyz was established in 1985 as a joint venture between various foreign companies. The company has grown from a capacity of 15,000 AC units in 1985 comprising of largely an assembly operation, into the largest and only integrated manufacturing unit in India for Auto Air Conditioning systems. The company has the capability to manufacture compressors, condensers, heat exchangers and all the connecting elements that are required to complete the AC Loop. The company has three plants in Noida, one in Manesar and one in Pune. It also has a R&D centre and Tool room in Noida. The manufacturing capacity has grown to a level of 7,50,000 AC units per annum and there is a plan to go to a level of 1,000,000 per annum by 2008.
The HR department of the company has its well developed training and development process but wants to move one step ahead with the training effectiveness evaluation process and make it more competitive. For the same they have implemented a policy wherein the employees are asked to take up a project based on the training which they had undergone and should have the practical application of learning in training. The employees are then to be evaluated for 'On-the-job training effectiveness evaluation' on their performance accordingly. In simple words, to show how they are applying their learning in their job. They give employees a duration of three months to evaluate themselves and for doing a project on the basis of his/her learning. Then employees rate themselves as per their learning. After that the employee is rated by his/her HOD (Head of the department) on the basis of the project and his learning and on the basis of application of that learning. Finally HOD rates his employees against the rating given by the employees themselves. HOD then writes remarks and provides recommendations to the HR department, which gives the HR dept. information to check whether there is any requirement of re-training or if their investment on the training of the employee is successful or not. This is how HR dept. conducts on the job evaluation of training effectiveness. But the problem which the HR dept. faces is that the employee takes this project work as a burden on their daily routine work and they escape from it. They do not understand the importance of the filling of the Training Effectiveness Form and taking up a project. Till the date of HR Audit the HR people keep on running after the employee to collect the Training Effectiveness forms. And finally when those forms are compiled it is observed that the employees just do it for formality sake.
After a lot of discussion on this topic, the AGM (HR) of the company conveys that if the company keeps on changing policies then it will create a wrong impression among employees. This wrong impression implies that the HR department will change the policies as and when a problem arises. AGM follows a school of thought that policies are not meant to be changed frequently. On the contrary the surprising fact is, while employee interacts with the HR Dept. the issue is never raised, from the employee side.
AGM says that today if only 10-12% employees take this exercise seriously then in future then only he will be on motivating his employees and make this policy successful, ignoring the fact that majority of employees escape from this exercise. He is adamant on his stand but still strives to find a solution for successful execution of this policy.
QUESTIONS:

1. Is the stand taken by the HR manager of not changing the policy is justified?
2. What would be your course of action had you been in the place of the HR manager?
3. Is the method implemented by the HR dept. to evaluate on-the-job training effectiveness proper? If 'NO', then what is the alternative as per your perception?