Diversity is an increasingly important factor in organizational life as organizations worldwide become more diverse in terms of the gender, race, ethnicity, age, national origin, and other personal characteristics of their members. The exact impact of within-group diversity on small group processes and performance is unclear. Sometimes the effect of diversity seems positive, at other times negative, and in other situations, there seems to be no effect at all. In this article, we suggest that these types of findings might be explained by using a "group-development" model to examine the impact of diversity on group processes and performance. Our model uses concepts from Jackson et al.'s (1995), Milliken and Martins' (1996), and other models, as well as our own concepts, to show how diversity affects group development and performance. Among the concepts included in the model are readily detectable personal attributes, underlying personal attributes, cognitive paradigm dissimilarity, cognitive costs and rewards, diversity management skills, group behavioral integration, and cognitive performance resources. In the pages that follow, we will explain each of the components of the model and suggest specific hypotheses generated from the model.