A few different factor play into who they choose to put on the cover. Topicality of who is hotright now and whoever they have a big interview with that week.
People Magazine tries to showcase a hit celebrity of the moment on their cover. If a celeb is involved in a scandal you can bet People will try to get them on the cover that week.
People magazine cover stories are chosen based on the current popularity and notoriety of the people that are willing to participate in an interview, or that are currently surrounded by a great deal of gossip or interest.