Step One: Show your approval - Kids are like the rest of us. They not only like to hear nice things said about them, they'll work harder to get more praise in the future. When you combine a sign of your approval with specific praise, the praise is that much more meaningful.
Step Two: Describe the positive - Make sure you child understands what they did so they can repeat the behavior in the future. Make it brief and to the point.
Step Three: Give a reason - Giving your child a reason for the praise shows the relationship between their behavior and the consequence. Make this relevant to them. Ask yourself, how will this behavior benefit them?
Step Four: Offer a reward (optional) - When you are especially pleased with a certain behavior, or your child made a big improvement in a certain area, you can reward your child with a special privilege.