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Nannies deserve the same care and respect you'd give any of your family members. They are, after all, the people who spend the majority of their time with your kids. They do a lot in the house and help alleviate stress so that you can go to work without worry. In an office setting, the employer might offer praise for a job well done, tell his or her employee to take an extra day off “just because”, or offer a raise or bonus. There's really no difference between you and the nanny. You're the boss; the nanny is the employee.
Think about it. When's the last time you sincerely praised your live in nanny for a job well done? Sure she gets paid to do what she does, but that doesn't mean you can't offer a pat on the back. Morale goes a long way in productivity, for any worker in any workplace setting. If your nanny truly is doing a great job, don't wait for your scheduled review to let her know, tell her now! It doesn't take much time out of your day to say, “You're really doing a great job; the kids love you!” Do you when her birthday is? Have a little celebration and get the kids involved. Those little things that you do will keep your live in nanny happy and a happy nanny is a happy family.