In Agile Methodology, team's capacity can be measured in terms of story points and those points can be determined using estimated time or user story complexity.
The first approach i.e. estimation based on time assumes equal expertise in team and does not indicate the difference between the hard to complete story and the one which is very easy and undemanding – this approach considers only how long the work will take to complete. The problem with this approach is a junior member may estimate more for a user story than an expert or senior member, in this case if we map time with story points then velocity may appear higher as compared to other members in team – which is not correct – also this brings in mind that the focus of this approach is more on a individual than the team.
Let’s talk about the other approach which is based on user story complexity – it refuses to quantify work in terms of time because this would undermine the self organization central to the success of the scrum team.
Determining User Story Complexity -
We would use Fibonacci series and our point scale would be 1,2,3,5,8. – limiting story point to 8 brings consistency and accuracy in estimation.
Assumption - story point is a function of Complexity, Risk, Efforts and Uncertainty.
Below is proposed mapping between story points and guidelines which can be followed while estimating story points.
1 story point - Small user stories, minor bug fixes, effort wise - several people on the team for a day.
2 story points - Simple stories that only affect parts of the team or application, more people working on the story for one or two days.
3 story points - Complicated user stories that have significant cross team interaction(or cross module or vertical /horizontal) but maybe only have a few people working on them, limited risk or few “unknowns”.
5 story points - Entire team working on complex user stories, for several days, with multiple “unknowns” or some risk.
8 story points - The most complex stories that the team can accomplish in a Sprint, entire team for a week, probably cannot get more than one or two 8s done in a Sprint. Also, if you found the story to be completely abstract – then its eligible for 8 story points. ( Most of the scrum teams avoid 8 story points and they break user stories into smaller chunks – this improves teams confidence, velocity – and brings more clarity in story )