Lab 1: The Hallucination Problem
Ask the LLM about NovaCorp's internal HR policy. It has never seen this document.
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Problem #1: LLMs don't know your private data
GPT-4o-mini has never seen NovaCorp's HR policy. Watch it confidently give wrong answers — this is hallucination in action.
Try these guided questions
📄 View the NovaCorp HR Policy document (the LLM has never seen this)
NOVACORP INDUSTRIES — EMPLOYEE HANDBOOK (2024 Edition) ====================================================== SECTION 1: ANNUAL LEAVE NovaCorp employees are entitled to 21 days of paid annual leave per calendar year. Leave must be applied for at least 14 days in advance using the internal HR portal (hr.novacorp.internal). Unused leave can be carried forward up to a maximum of 5 days into the next calendar year. Employees on probation (first 6 months) are entitled to only 7 days of leave. SECTION 2: WELLNESS DAYS Every NovaCorp employee receives 7.5 Wellness Days per quarter (non-transferable, non-encashable). Wellness Days cannot be combined with annual leave. Wellness Days must be approved by your direct manager at least 48 hours in advance. Wellness Days expire at the end of each quarter — they do not roll over. SECTION 3: PATERNITY LEAVE NovaCorp offers 14 days of fully paid paternity leave. To apply, employees must submit Form W-77B to the Culture Team at hr-culture@novacorp.internal. Form W-77B must be submitted at least 2 weeks before the expected date of birth. Paternity leave must be taken within 3 months of the child's birth. Part-time employees are eligible for pro-rated paternity leave. SECTION 4: MATERNITY LEAVE NovaCorp offers 26 weeks of fully paid maternity leave. Maternity leave begins 2 weeks before the expected delivery date automatically. Employees must notify HR via Form M-12A no later than the 20th week of pregnancy. An optional 13-week unpaid extension is available upon written request. SECTION 5: REMOTE WORK POLICY All employees at Level 3 and above may work remotely up to 3 days per week. Level 1 and Level 2 employees may work remotely 1 day per week after completing 6 months of service. Work-from-Mars Fridays are a special perk approved only for Level 6+ engineers — full remote with no check-ins required. Remote work on public holidays is not counted as a remote day. Employees must be reachable on Slack and email during core hours: 10am–4pm IST. SECTION 6: SICK LEAVE NovaCorp provides 12 days of paid sick leave per year. Sick leave beyond 3 consecutive days requires a doctor's certificate submitted to hr@novacorp.internal. Sick leave does not carry forward to the next year. Mental health days are classified under sick leave and do not require justification beyond self-declaration. SECTION 7: PUBLIC HOLIDAYS NovaCorp observes 12 public holidays per year. A full list is published on the HR portal by January 15th each year. Employees working on public holidays receive double pay or a compensatory day off. The choice between double pay and comp-off must be made within 5 working days of the holiday. SECTION 8: PARKING AND FACILITIES Free basement parking is available for all full-time employees (Levels 1–6). Parking passes must be obtained from the Admin team on the ground floor. Two-wheeler parking is free and does not require a pass. EV charging stations are available on B2 level, bookable via the facilities app. SECTION 9: HEALTH AND FITNESS BENEFITS NovaCorp reimburses up to $500 per year for gym memberships and fitness classes. Claims must be submitted via the benefits portal with receipts within 30 days of payment. Eligible expenses include: gym memberships, yoga classes, swimming lessons, and sports equipment up to $100. Mental health counseling sessions are fully covered — up to 12 sessions per year with any licensed counselor. SECTION 10: PERFORMANCE REVIEWS Performance reviews are conducted twice a year — in June and December. Employees receive a rating from 1 (Below Expectations) to 5 (Exceptional). Ratings of 4 and 5 are eligible for bonuses ranging from 10% to 30% of annual salary. All employees must complete their self-assessment form at least 1 week before the review meeting.
Takeaway: The LLM is trained on public internet data. Your private company documents don't exist in that training data. So it either makes up a plausible-sounding answer (hallucination) or gives a generic response. RAG solves this — we'll see how in Labs 3–5.