This research examined how efforts to ensure demographic diversity in a work group affected perceptions of the competence of individuals who are likely targets of such efforts. In three experiments, 262 undergraduates gave their impressions and performance expectations of members of a group assembled to work on a task. When a diversity rationale rather than a merit rationale was provided for how the work group was assembled, both women (Studies 1 and 2) and Black men (Study 3) were perceived as less competent and were expected to be less influential. This effect occurred regardless of the proportional representation of women or the degree of the groups' heterogeneity. The diversity rationale also produced more negative characterizations than did another non-merit-based rationale: scheduling convenience.