How much to hike her pay is trickier: Her performance and your budget should be your main guides, but you'll also want to make sure the increase keeps her salary competitive with that of other sitters in your area. (Ask friends, co-workers, or an agency.)
"You needn't go to the top of the pay scale or over it," says Douglas. "But if you're at the low end, someone else may lure her away."
Upon the arrival of a new baby, plan on paying more. Again, check what other families in your area give.
Money needn't be the sole reward, of course. Be creative: Offer your sitter more vacation time, allow personal use of your car, or sign her up for a childcare-related course that she wants to take (a perk for everyone involved!).