My wife always compares my parenting with her sister's husband's parenting and thinks he is a much better father than me. I find this comparison annoying and heartbreaking. How do I make her understand this?

Can understand the annoying. Think with an open mind if there is something you can learn from their style. Tough but may help your child a lot. If you still believe in your style and think it is correct , Tell her they have their own ways of thinking and value system and expectations From their child which may not be the same as yours