Employee can make or mar an organization. As this fact proved time and again, it ratified the significance of human resources for the organization. Therefore HR strategies have been net under the shadow of employee empowerment. There are various effects of employee empowerment over human resources and the organization. Every department, every activity and every person at every level is essential for integrating the organizational efforts in TQM. The crucial determent in successful implementation of TQM is employee focus. MSMEs play critical role in the economic development of a country. Quality management of these MSMEs is would be critical for their stability. The aim of the paper is to examine the level of employee empowerment in terms of employee interpersonal relations at MSMEs of Ballari, Karnataka. The universe comprised executive and non executive workforce of the firm. Sampling was carried out using convenient sampling technique with sample size of 50 in line with the Cochran formula. Data was collected using observation and informal interview methods. Descriptive statistics and Chi-square test was used to analyse the data. The research envisaged that all the factors of employee empowerment are associated with customer loyalty of the firms. As per the findings, formal communication, employee satisfaction and cross functionality at the MSMEs has significant influence on employee interpersonal relations.