Photoalignment materials, such as the azobenzene-based PAAD series studied here, are becoming increasingly important in liquid crystal-based optical devices and displays. Yet their properties and, in particular, their response to light, are still not fully understood. We investigate, experimentally and theoretically, the photoinduced birefringence, the order parameter and the formation of surface relief gratings, as well as the diffraction caused by them. We show that some of the azobenzene PAAD materials are suitable for the formation of surface relief gratings with high modulation depth, while others exhibit strong photoinduced birefringence. The two effects are inversely correlated: the stronger the surface relief grating is, the weaker is photoinduced birefringence. Analytical formulas based on the Raman-Nath approximation and numerical simulations of Maxwell's equations are used to quantify the diffraction caused by the induced diffraction gratings, showing excellent agreement between theory and experiment.