Hi T.,
In my experience, it is hard to find both a great person with your kids and a great housekeeper.
For me, she should be able to keep the children's mess clean, esp. their room, dishes and laundry. I have had nannies that made a huge mess playing with the kids and I had to clean up after she left. That really peeved me.
The other house stuff is extra, in my opinion.
I would address without any emotion of showing disappointment and say, "could you do me a favor and ensure that everyday you teach the girls how to care for their room and things by teaching them how to clean-up their things? Also, could you ensure the their laundry is done on a weekly basis?"
I would sit down with her and have a discussion about the requested cleaning and ask her to talk about her thoughts regarding how realistic it is to get it done. I believe teaching the kids how to clean their own mess is definitely something that should be done. The regular housework should be done when time permits.
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Added a day later:
Hi T.,
I wanted to add that what we always end up hiring a housecleaner - I love the days the housecleaner visits.
Our nanny watches our two sons and keeps their room, bathes them, feeds them great snacks, does their laundry, fixes their toys. She is the sweetest thing and we love her very much. She doesn't do anything else to keep the house clean and we don't expect her to.
Only once did I have a nanny that did more. She would clean the kitchen, do the dishes and mop/sweep our floors every day. I always appreciated this. She started her own family and I bet she keeps a fantastically clean home raising her daughter.
When I searched for our first nanny, I wanted someone to do both cleaning and caring for the kids because I was a SAHM returning to the workforce. I kept the house clean so I knew it could be done. I would teach my son to play by himself while I cleaned the house. Or cleaned during his naps.
I actually kind of drove my DH crazy because I went a little Type-A over the whole thing. I had the house completely organized, labeled, handles facing the same way, labels of the cans facing out. Laundry done and folded Martha Stewart style. I was a bit fixated on organization and organization systems. My husband and I laugh about it now because I was Type-A'ing over the SAHM thing. I work full-time now and love the challenge of being a great leader at work and a great mom/wife at home. It works for me.
My motto about SAHM or FT outside working mom and all that there is in-between: "To each her own." There is no right or wrong. There are pros and cons to each and it depends on the woman.
I believe it is possible for a nanny to do it all. However, what I have found is that there aren't many Type-A nannies. :-) If I were you, hire a housecleaner. It will make you happier. At least on the days the cleaner visits.