The pair have endured a fractious relationship at the Etihad Stadium since the Italian forward arrived from Inter Milan for £24m in August 2010.
Balotelli has recently been accused of not pulling his weight in training and has often found himself on the bench this season.
And after being hauled off in the 52nd-minute with City trailing 2-0 to their neighbours, Mancini said: "I love Mario but it is important for him to start to think about his job.
"He has everything to play well but he can't continue to play like today. We wanted more from him.
"When you have a player that has Mario's quality, you cannot understand why he continues to throw it out of the window. It is incredible.
"I have seen players in my life with fantastic quality. But in the end, they did nothing. I don't want Mario to finish like these players. It would be bad for him."
Mancini backed his decision not to start with Carlos Tevez and choosing Balotelli, who stomped into the players' tunnel after being substituted early in the second half at the Etihad.
He said: "It is easy to say after the game. I thought Mario could create problems for them. He is young and runs quickly - when you decide before the game this is what you think."