Workforce diversity has been depicted as a double-edged sword that leads to both positive and negative work-related outcomes. As a result, the critical issue in diversity research is concerned with enhancing the benefits and reducing the detriments of heterogeneity within organizations on work behaviors. By combining theories on diversity and inclusiveness, this article examines inclusive management at the federal subagency level as a moderator of the relationships between demographic diversity (gender and race) and work behaviors (innovative and turnover behavior). Using survey and personnel data drawn from federal subagencies, inclusive management—a set of policies aimed at recognizing all employees as valued organizational insiders with unique identities—not only strengthens the positive relationship between racial diversity and innovative behavior but also attenuates the positive relationship between gender diversity and turnover behavior. These findings suggest that inclusive management is a key strategy for effectively managing diversity.