You can't organize people by "merit." Hell, it's true in video games. In Jagged Alliance you often take the shittier merc because he has the one skill you think you need and don't have.
Yea because you're looking for that skill and he has merit in it.
Or maybe that high merit merc doesn't get along with a merc you already have.
I've also been involved in a lot of hiring and I think its reasonable not to hire people because of toxic personalities, I've rejected plenty.
But I'd say people skills (depending on the job) are a form of merit too.
I think what the others are saying when they criticise "diversity" is that you shouldn't be hiring people based on things like race, religion or sexual preference, unless it's relevant to the work.