Everton are still searching for a new manager following Ronald Koeman's dismissal last month.
Koeman was let go nearly four weeks ago now, but Everton still have not found a new manager.
David Unsworth remains in temporary charge at Goodison Park, and Neville believes that the caretaker boss has been handed a very difficult task.
“David Unsworth is in a horrendous situation where he's got to address the players when the team are thinking: "Are you going to be manager next week?,” the former Everton man said.
“It is becoming very difficult for him to do the job because he doesn't know where he stands. I find it amazing that a club like Everton find themselves in a position where after three or four weeks they don't have a decision.
“They've sacked a manager, so make a decision and get the man. If they didn't have an idea of a candidate that they wanted and could get, then they shouldn't have sacked Koeman. It really frustrates me seeing a club I love being put in this situation.”
Unsworth was once considered in with a chance of taking over at Everton, but results may have cost him a shot of becoming permanent manager at Goodison Park.
Everton have won just one of the five matches that Unsworth has taken charge of since Koeman departed.
Everton managed to draw 2-2 with Crystal Palace at Selhurst Park in their most recent fixture, but their performance was far from sparkling.
Everton are next in action on Thursday evening against Atlanta in the Europa League, and it seems likely that Unsworth will remain in charge for that fixture.