Call a class method in an after_save

Make it an instance method by removing self.

# now an instance method
def update_menu
   @@menu = Category.all
end

It doesn't make much sense to have an after_save callback on a class method. Classes aren't saved, instances are. For example:

# I'm assuming the code you typed in has typos since
# it should inherit from ActiveRecord::Base
class Category < ActiveRecord::Base
  attr_accessible :name
end

category_one = Category.new(:name => 'category one')
category_one.save  # saving an instance

Category.save # this wont work

after_save :update_menu

def updated_menu
  self.class.update_menu
end

this will call the class update_menu method

after_save 'self.class.update_menu'

Rails will evaluate a symbol as an instance method. In order to call a class method, you have to pass a string which will be evaluated in the correct context.

NOTE: This only works with rails 4. See Erez answer for Rails 5.