This paper seeks to advance the diversity literature by investigating organizational
performance consequences of age diversity. Drawing from social-identity and socialcategorization
theory, we theoretically argue that, in age-diverse companies, age-based
subgrouping processes occur, favouring a shared perception of a negative age-discrimination
climate. This perceived negative age-discrimination climate in turn negatively relates to
organizational performance. As the main contribution, top managers’ negative age-related
stereotypes and diversity-friendly HR policies are introduced as organizational-level
moderators that increase and attenuate, respectively, the social categorization processes
affecting performance in age-diverse companies. We utilized structural equation modelling
(SEM) to test the proposed hypotheses using a multisource dataset comprising 147 companies.
The results supported all hypotheses, indicating that low negative top managers’ age
stereotypes as well as high diversity-friendly HR policies are potential organizational factors
that can prevent the negative relation of age diversity with organizational performance
transmitted through the negative age-discrimination climate. These results are discussed in
light of their contribution to the diversity literature and social-categorization theory as well as
their implication for practitioners