the grouping of the rows on the basis of specific conditions in sql server

Based on your data (where the criteria are 1, 2 and NULL for n/a), a simple ‘group by’ the employee, and MAX of the columns, should work e.g.,

SELECT 
    yt.EmpID, 
    yt.EmpName, 
    MAX(yt.A_Shift_Status) AS A_Shift_Status, 
    MAX(yt.B_Shift_Status) AS B_Shift_Status, 
    MAX(yt.C_Shift_Status) AS C_Shift_Status, 
    MAX(yt.D_Shift_Status) AS D_Shift_Status
FROM
    yourtable yt
GROUP BY
    yt.EmpID,
    yt.EmpName;

For the shift statuses

• If any of them are 2, it returns 2
• otherwise if any of them are 1, it returns 1
• otherwise it returns NULL

Notes re 1/2/3 (which was specified as criteria) vs 1/2/NULL (which is in the data)

• It gets a little tricker if the inputs are supposed to use 1/2/3 instead of 1/2/NULL. Let us know if you are changing the inputs to reflect that.
• If the input is fine as NULLs, but you need the output to have ‘3’ for n/a (nulls), you can put an ISNULL or COALESCE around the MAX statements e.g., ISNULL(MAX(yt.A_Shift_Status), 3) AS A_Shift_Status