"Individually it wasn't good enough. In possession it wasn't good enough. So sloppy, giving the ball away all the time."
Scholes, who retired from football for a second time in 2013, spent his entire career at United, mostly in central midfield.
But it is in this area of the field that Scholes believes United have their greatest problems, saying his former team-mate Michael Carrick, an unused substitute against Watford, ought to start.
Scholes also suggested Marouane Fellaini was not the right player to sit alongside Paul Pogba in midfield.
"I thought Fellaini was all right, he does a job which stops the other team. But I think if you're Manchester United you need more than that," Scholes told BT Sport.
"I think you need someone who can stop the play -- but he needs to be capable of controlling the game of football as well, playing forward, passing forward.
"As well as he (Fellaini) has done in the first three or four games, I just can't understand why Michael Carrick's here."
He added: "It looked last year like he was leaving, he's not been involved a minute of the season, so what he's done I don't know.
"Obviously (Bastian) Schweinsteiger -- he (Mourinho) is not keen on him. They need to get a playmaker in there. You're coming to Watford, you're not going to Arsenal."
Scholes was concerned by how often Watford opened up United's defence, adding: "I expected them to be a lot tighter defensively, especially with bringing Chris Smalling in, but they were all over the place and every time a ball came into the box you felt Watford were going to score.
"Something's not right there. The cohesion of the team isn't there. He (Mourinho) needs to find the right mix of players."
-News.com.au