I think the only thing to fault in Soviet rocket development, along the admittedly ruthless path of OTL, is that they don't have the habit of pre-testing stuff before throwing a test rocket together. They are then stuck with having total rocket failures in the early days. It seems pretty wasteful, but it has the virtue of rushing something that with good luck might prove to be fully functional already onto the launch pad years earlier than an American approach would get it there. Or alternatively it is sometimes possible to substitute money (or equivalent resources) for time and develop everything, checks and all, in parallel. In that case the Soviet approach is cheaper, though riskier.
It merges with the general problem of poor quality control across the board in the USSR--go ahead and make lots of stuff counted to fulfill the Plan and get bonuses for over-Plan production, and then sort through the resulting bins full of junk--"brak"--for the actually serviceable goods that might have managed to be produced and hope one can foist off the cruddy stuff on some pretext or other.
A Soviet union that was more humane might conceivably exist that still addresses none of these problems. Realistically there is some clear linkage--insofar as Soviet production in general tended to fall short of goals, the pressure to find suitable scapegoats was always on, which led to a cascade of deplorable behavior while of course reinforcing and worsening the problems causing the sloppy work in the first place. It is hard to maintain civility while everyone is falling so comically and yet tragically short. Stalin did not invent the nastier aspects of Soviet society, he merely used them (and thus amplified them) to pave his path to power. Indeed even if one could cure the Old Bolsheviks of their infighting and cronyism and set them higher standards in judgement and in seeking to maximize human potential instead of writing off entire segments of the population as born "class enemies," there are many reasons the dysfunctions of Soviet work processes tended to happen, I suspect relating deeply to human tendencies as hominids who evolved as gatherer-hunters. After all Marxists have a bit of a romantic picture of "primitive communism;" they may have done a better job of replicating this state of nature than they realized! Our ancient ancestors tended to avoid work when they could, and often lived through binges of feast and famine that averaged to a minimal though survivable diet, much as Soviet workplaces tended to start a month near-comatose, recovering from the previous binge, slowly recover to a sustainable average, then as the end of the month approached with its deadlines in terms of gross production targets receding appallingly far beyond actual attainment, panic and a surge of "storming" activity sets in, people working 12, 16 hour shifts merging into successive all-nighters in the mad scramble to meet and surpass quotas (bonuses hinge on exceeding norms) and thus back to the start of the monthly cycle, in exhaustion akin to that after a hard-fought battle. This is probably closer to our evolutionary nature than maintaining a steady, machine-level weekly pace, year in, year out.
The goal of the Bolsheviks was to achieve results first comparable to, then surpassing, Western capitalist methods, and to achieve them by a markedly different route. In none of my studies of the Soviet system as it evolved do I find any serious systematic attempt to study Marx's Capital, and draw lessons from it in how to transfer what works well in capitalism over to the hopefully more humane and democratic society they wished to graft rational industrialism onto--or more accurately in the case of the Bolsheviks, hoped would grow spontaneously out of a rational industrialism! They treated the problem of the new society and the new industry as one and the same in principle, and in practice, perhaps after spending years and much thought on planning out superior socialist living conditions, set aside actually investing in making these first in favor of getting the factory built while workers scrambled for some sort of improvised shelter and food catch as catch can; generally by the time they got around to belatedly making the dormitories and so forth that were to have been the crowning glory, the workers had gotten attached to their painfully improvised digs (often literally digs, "mud huts" were half buried) and scorned the dorms with their lack of individual family kitchens and so forth. Or reworked them to try and shoehorn in amenities they were designed to be without.
The necessary transformations of Bolshevik attitudes to attempt to preempt these glaring travesties of myopic planning would be so great and deep I find it hard to imagine just what sort of society might reasonably emerge. There is a book I got ahold of some years ago and found rather slow and dull reading, that seemed to be suggesting that back in the NEP 1920s, an alternative to the heroic top-down military modeled factory building of the Stalinist plans of the late 20s and after may have been emerging. Under NEP nominally state/worker owned factories tended to simply churn out whatever the workforce was comfortable building and the plant facilities set up for making might have happened to be, and then they'd try to find markets locally for the stuff they made. If I read it correctly, a sort of system of syndicates was emerging, various middleman bureaus that would send agents to the various factories, inform them of products that other plants or peasant collectives needed or wanted, give instructions in how to build these items, and then persuade the factory to produces these items to spec and deliver them to the target market. The problem was, although those syndicates were by no means private firms for profit, and their staffs were just as dedicated to Bolshevik goals as others were, they looked suspiciously like private enterprise to most Bolsheviks, who had seem a rough and ready command economy of a certain type operate, however woozily, during the Civil War under so-called "War Communism." According to this author Trotsky was as guilty or more so than Stalin of valuing Bolshevik Party control over all workplaces on a military model, and regarding top-down planning and dictated plant production goals as virtuous in itself. Indeed, in the process of sweeping aside the quasi-spontaneous system of distribution syndicates and ruthlessly replacing them with such an industrial system with an openly declared mandate to squeeze as much product for as little support out of the workers as possible, Stalin initially relied on old Trotskyists to do this first phase dirty work, purging them only later for their old ties to the Enemy of the People.
I've often wondered since then how a system of interlocking syndicates pipelining the outputs of one firm to the inputs of another, and seeking to guide each step of production toward the desired goals of the ultimate consumer (while to be sure to some extent luring the ultimate consumers to match their desires and expectations to what could be most sensibly made by the collective work process) might have compared overall to Stalinist industrialization.
There are deep reasons to doubt that the Bolshevik leadership could be persuaded to accept it unfortunately.
The problem with trying to envision such alternate paths for Soviet development is that it is all too easy to get caught up in the notion that it might have worked, and to then rush ahead with the Marxist visionary notion that with a workable system bypassing the fetters and bottlenecks of capitalism, that technical advance might snowball and technical prowess indeed surges ahead to match and surpass capitalist rates of development, and then envision Soviet capabilities accruing at such a rate that the USSR is indeed five, then ten, then 25 years ahead of OTL capitalist benchmarks and before you know it we do indeed have Soviet super science setting up Moon colonies by 1980 and terraforming Mars before 2050!
On one hand, many people would forthrightly assert any pragmatic alternative to capitalism is just plain impossible and the whole thing must collapse, with optional World War III, sometime before the end of the previous century. On the other, if we figure there have to be alternatives, we don't know the inherent constraints and checkpoints that emerge in those in practice, whether they can be engineered away by the right applications of technocracy and democracy, or whether they do create some Orwellian insectile New Soviet Man more scary than any reactionary of the past century ever imagined in their worst nightmares, or what. Not knowing the nature of the perhaps, probably, inevitable frictions and bottlenecks we veer helplessly between pessimism and optimism.
So it is that even in a happy-Strugatskyite Soviet wank, I find it hard to believe that they would indeed zoom forward deliriously. That being the case, when I look at OTL Soviet accomplishments in rocketry, what I see is that on the whole they made rockets that worked pretty well to accomplish the goals set for them, and that they generally did not blow up or otherwise wreck havoc. Or rather, due to the regime's calloused disregard of what we'd call environmental concerns (which seems likely to become a flaw of even an optimistic Soviet-wank, though one might hope that they'd see what was happening and impose controls and checks to mitigate and possibly reverse it--but a fair amount of Soviet ecological catastrophe such as the outcome of Khrushchev's "Virgin Lands" program was not an industrial side effect but directly due to hubristic misunderstanding of ecosystems and what they teach us as such) certain categories of harm happened without let or hindrance--such as the contamination of vast sweeps of Central Asia and Siberia by hypergolic launch systems.
But progress was made. They got the first satellite up, their second was a practical piece of scientific instrumentation and still beat Explorer 1, they got the first human being into orbit, and meanwhile the ICBMs they made eventually, by the middle of the 1960s, subjected the USA to the same balance of terror directly that hitherto had only threatened Europe. The rockets that did all this were in some respects pitiful and backward, particularly compared to aspects of say the Saturn V or even 1B, but in other respects more than equaled American standards. Soviet ker-lox engines took a long time to match the F-1 engine in thrust,but quickly pulled ahead in ISP, as did their hypergolic engines. They were often able to do more with less in terms of tonnage to orbit by the relatively simple expedient of massive G factors toward the end of burns, which lowered the net "mission delta-V" though putting more of a strain on equipment, which often had to be heavier than American products to do the same job. They gradually stumbled toward standardized launch equipment, though conservative inertia perhaps.
It is not clear to me then that they could have been expected to accomplish even more a lot sooner even if the number of creative workers were doubled while ATL superior methods of work coordination enabled clashing visions to mesh more efficiently. I'd think that the more humane and reasonable the Soviet methods of managing things evolved to be, at whatever stage, the less pressure would be felt to accomplish something solid by a certain deadline. Instead of the forms of waste OTl we might have seen more fertile imagination materialized in experimental projects, more avenues explored. But in terms of the main focus of workaday hardware produced, I suspect it would tend to correspond more or less to OTL. Perhaps instead of hypergolics, we might have seen an earlier push into orbit and a first generation of quasi-storable fuel missiles based on hydrogen peroxide and kerosene, which is a particular bee in my bonnet, and then subsequent development avoids heavy hypergolic launchers in favor of perhaps your alternative propane-LOX while only specialized military missiles delve into dangerous hypergolics which are strictly limited to where they are urgently needed. Perhaps the Soviets would develop solids in parallel with the West and bypass hypergolic missiles completely.
And perhaps with a more sensible program of advance and carefully systematic testing, something like N-1 might be made to work, perhaps with schemes to recover the massive first stage which after all would come down over land anyway.
But I just don't think they'd zoom ahead on their OTL track but faster: I suspect "surplus" energy not wasted by terror and marginal conditions OTL would go into theoretical creativity and tend to dissipate into lots of tentative testing programs with only a few of the fruits of these investigations being harvested as it were and developed for regular operations.
I suspect that even with a more rational and humane basic social setup, they would tend to be impetuous, throwing together complex systems in the hope it all works at once, and accepting that catastrophic failures on the pad are a price they pay for meeting optimistic targets sooner on paper. I suspect that is a Russian thing, perhaps a baseline human thing we have pounded out of us more in the West than these pioneers of alternate ways would have allowed to be done to them. And that overall, it won't slow them down too much, not more than it also speeds them up.