"They are scrapping away for their lives at the moment, getting to the FA Cup semi is an achievement in itself," Pearce told the City website
"The one thing you can say about them is that their spirit won't die. They'll go for 90 minutes because they have a strong game plan.
"They make it difficult for all their opponents, and at the end of the match you know, as we did in December, that you've been in a game."
But Pearce said he had no qualms about sending Watford down as the Blues aim to push for a top-half finish.
"I've been relegated in my time and it's not a nice process to go through, I understand that, but I can't feel sorry for somebody else," he added. "There's not a manager in my position that would.
"I don't mean that in a selfish manner or a nasty manner, but in a manner that suggests that's the beauty of sport.
"The fact that someone else has got relegated means that my team hasn't. It means that I've finished further up the league and that's the nature of the game we're in - the winning business."