The OUTPUT clause is in the wrong place, too. that's one of the causes of your error.

It goes AFTER the affected columns list.

CREATE PROCEDURE [dbo].[Employee_Add]

@CategoryID Int,

@EmpName varchar(10),

@CreatorUserID Int,

@SenderUserID Int

AS

BEGIN

SET NOCOUNT ON;

INSERT INTO Empl (

CategoryID, EmpName, CreatorUserID, SenderUserID, CreatedDate,

LastModifiedDate, IsDeleted )

OUTPUT INSERTED.ID --<-- OUTPUT goes here

VALUES

( @CategoryID, @EmpName, @CreatorUserID, @SenderUserID, DEFAULT,

DEFAULT, DEFAULT )

END

Now - the column names need to be the same as what's in the destination table, so Grant is probably right as well...