Hah, that's quite an expansive topic. In short, it was somewhat meritocratic but ultimately driven by politics, which had a labyrinthine level of complexity.

Much of the Soviet system revolved around a system of central planning and successions of "five year plans". Within these plans would be a series of various sub-plans, goals, deadlines, and quotas all supporting the higher level plan. Various officials would have different levels of responsibilities, and the degree to which they were able to meet (or exceed, or not meet) these quotas and deadlines would factor into how they were viewed by the party hierarchy above them. However, it's not so simple. Someone might be able to achieve their quotas, but somewhat illegitimately, and that might be well known. For example, if they are responsible for building an apartment block, they might do so, but the quality of construction might be quite poor. Or, they may fail to achieve their quotas and deadlines again and again but be working on a project that is known to be considerably difficult and have some other way of making the quality and importance of their work (or the work they are supervising) known. And that might result in a more favorable relationship with the party bosses despite seeming to be falling down in their duties on paper.

Ultimately, many working within the Soviet system knew that the official method of central planning was somewhat unrealistic and didn't map 100% to the way things actually got done in practice, which created a lot of back channel and informal mechanisms to get work done as well as ways of recognizing who was good at getting things done and who wasn't.

Of course, there were also innumerable interpersonal relationships which played as much of a role as anything else. Being in the good or bad graces of powerful individuals could affect one's likelihood of being able to move up in the party. As could being well liked or disliked by various groups at various levels, or of being seen as highly or insufficiently patriotic. It was in many ways a complex machinery of interlocking and interacting cliques just like any aristocratic court.

There's an interesting comparison in Serhii Plokhy's Chernobyl: The History of a Nuclear Catastrophe. On the one hand you have Vasyl Kyzyma, in charge of construction of the nuclear power plants at Chernobyl, on the other hand you have Viktor Briukhanov, in charge of operating the built power plants. Kyzyma's crews were consistently behind on quotas and deadlines, often by large amounts, while Briukhanov's workers were able to surpass their power production quotas consistently. Despite this, Kyzyma was much more highly regarded by the party apparatus than Briukhanov. Partly this was because many considered the job of constructing the reactors to be much more difficult than operating them, even though that determination existed nowhere in the official quotas and timetables. And also partly just because Kyzyma was a much more likable and charismatic person.

If you were a highly capable individual and if you were lucky enough to be placed into circumstances where it was possible to show that (e.g. not given a nearly impossible task or extremely unrealistic quotas or deadlines) it was possible to get ahead and climb upwards. However, for every paving stone on the pathway of meritocracy there were as many (if not more) land mines. It was easy to rub someone important the wrong way. It was easy to be thrown under the bus by being set up to fail and being made a scapegoat. And it was easy to be surpassed by individuals who were better at gaming the system than getting the job done. It was a complicated and treacherous system.