The compatibility of merit principles and diversity management is particularly intriguing in theory and practice. Although theoretical arguments for merit-based practices and diversity management are well established, the effect of their dynamics on governmental performance remains an empirical issue. This article examines the effect of merit principles, workforce diversity, and diversity management on government performance, and inquires about whether diversity management efforts moderate the effect of merit-based practices. Analyzing a combined data set on federal agencies, this study finds that merit-based practices and diversity management have independent positive impact on organizational performance, but there is no significant relationship between workforce diversity and performance. Furthermore, the effect of merit-based practices on organizational performance is moderated by gender diversity and diversity management. Specifically, if an agency has a more diverse workforce in terms of gender or more effective diversity management efforts, the positive effect of merit-based practices on organizational performance is strengthened.
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