Methods and systems for a networked storage system are provided. One method includes assigning by a processor executable management module a service level objective (SLO) for a workload, where the SLO is allotted a plurality of performance parameters for tracking performance of the workload for storing data in a networked storage environment; tracking historical performance of the workload to determine a duration when SLO allotment defined by the plurality of performance parameters is being under-utilized; adjusting automatically the SLO allotment for the workload during the duration when the SLO allotment is under-utilized; and re-allocating automatically the available performance capacity of a resource used by the workload to another workload whose assigned SLO is not being under-utilized.