We use pronouns to substitute the nouns or to refer to them that is why we have to use the right pronoun to prevent misunderstanding.
The following rules of the pronoun usage will help you to convey your idea clearly to the reader:
1. Pronouns must agree in number.
e.g. If the teacher gives you an assignment, he or she must explain it.
Note: The indefinite pronouns EVERYBODY, ANYBODY, ANYONE, EACH, NEITHER, NOBODY, SOMEONE, and a noun "PERSON", etc. are singular and require singular pronouns.
e.g. Everybody is free to express his or her opinion.
The phrase "his or her" may seem wordy, so try using a plural noun to go with "they/ their".
An employee should know his or her rights. (Employees should know their rights.)
2. Pronouns must agree in person.
Do not change the person of your narration in the course of the story. It will only confuse the reader.
3. Refer clearly to a particular noun.
Do not be vague or ambiguous.
E.g. The huge cloud spread all over the gloomy sky, but it made a very impressive sight. (Is "it" the sky or the cloud?) Circus is coming to our town that is great. (What is great, the circus or the fact that it is coming to our town?)