Question from Martin: If you had a user story (Story X) with 4 story points at the start of the sprint which was not completed by the end of the sprint but the majority of the work was done (eg just 2 small bugs remained) would you recalculate the story points when adding this into the next Sprint – for example effort was now only 1 to complete the story. How would this have an effect on velocity planning?
Answer: We don't play horseshoes. (Do you know that game?) There is no partial credit in Sprint N. And, if everything is completed in Sprint N+1 (according to the Def of Done), then the Team earns FULL credit in Sprint N+1 (4 story points).
But, you say, that is unfair!
Well, in a way. So, yes, to get a fair velocity estimate for Sprint N+2, you must use the average over the last X sprints (people argue how large X should be....let's say 4).
If they Team says: "Well, if we had divided that into two SP2 stories, and earned 2 more SPs of velocity in Sprint N..." You say..."Yes, but you didn't."
This gives the Team a big incentive to have smaller stories (which virtually 110% of the time, smaller stories would make everything better).
Why? Well, it does seem like making the stories smaller takes more time. To do that, to put story points one, etc, etc. And there is some truth to that. BUT...by making the stories smaller, it turns out that the feedback (and other factors) are much much better. So, net net, there is a savings of effort. If we are smart, and use the feedback (and other benefits) well, professionally.
Remember what Yogi Berra said: "It ain't over till it's over." Meaning, for us: We never know if our work is really complete until it fully matches the Def of Done. Sometimes they say 'there are only 2 small bugs remaining'. But only after they are fixed and re-tested do we really know the bugs are small. This is just so true for our kind of work. You probably see it every day on your team. (Give them specific examples.)
Next issue: How much work should the Team take on in Sprint N+1?
Answer: Let us assume that they can predict with reasonable accuracy that Story X has only 1 SP worth of work 'remaining'. Let's assume that the average Velocity is 20. And that Story X will be done in Sprint N+1. Then, of Sprint N+1, the Team will 'use' 1SP for Story X and then have 19 additional SPs of 'capacity' for that Sprint. Still, they will end up earning 23 SPs (assuming they get everything done this time). That is 19 SPs for new work, and 4 SPs for Story X.