The development of the personal potential of academic staff and higher education applicants as an integrated criterion for the effectiveness and efficiency of university management is substantiated in the article. To give ground to his position, the author proceeded from determination of the effectiveness and efficiency of university activities. The effectiveness of university activities is defined as the degree of compliance with the result secured by the goal it pursued. The efficiency of university activities is a qualitative indicator that determines the degree of use of resources (human, material, financial, etc.) in achieving a particular result. Methodological incorrectness of determination of efficiency of university activities by formal criteria is emphasized. In particular, the diploma of higher education regardless of the level of competence and development of the personal potential of its owner. The impossibility of correct differentiation in the value expression of the results of educational and scientific activities of the university is proved. The necessity of defining and substantiating alternative criteria that would orient the management to ensuring the effective and efficient operation of the higher education institution is kept current. In case of incorrect appeal to quantitative criteria, it is suggested for the management to focus on evaluation of criteria in determining the results of university activities. Assessment scales of such relevance are recommended. They should guide the management of a higher education institution to improve the activities. At the same time, the improvement of results should be achieved not at any cost of resources, but at the minimum permissible without deteriorating their quality. It is noted that only with the use of such methodological approach the efficiency of the university's activity as a guarantee of its competitiveness can increase. The competitiveness of the university is proposed to be considered as an integrated indicator of corporate competence of all participants of its activities, including managers, academic staff and applicants for higher education. It is emphasized that unlike other resources that are inevitably spent, human resources in the process of their use are self-renewing and developing. Self-renewal and the development of human resources or human capital are better the more developed the personal potential of university participants is. In addition, the level of development of the personal potential of higher education applicants is the current and final result of the university's educational activities. The more advanced personal potential the university graduates have, the more productive they will be in their careers, therefore, more expensive in terms of value and vice versa. After all, the more productive persons with higher education, the more productive the society in which they work is and the more prosperous life in such a society is. In its turn, the development of the personal potential of higher education applicants in the learning process depends directly on the level of personal capacity development of the academic staff with whom they interact. Not only the effectiveness of educational but also scientific activities depends on the personal potential of academic staff.