diff --git a/util/argo/resource_tracking.go b/util/argo/resource_tracking.go
index f6b98683e9e91..476f739c13924 100644
--- a/util/argo/resource_tracking.go
+++ b/util/argo/resource_tracking.go
@@ -149,6 +149,7 @@ func (rt *resourceTracking) SetAppInstance(un *unstructured.Unstructured, key, v
 		if err != nil {
 			return fmt.Errorf("failed to set app instance label: %w", err)
 		}
+		return nil
 	case TrackingMethodAnnotation:
 		return setAppInstanceAnnotation()
 	case TrackingMethodAnnotationAndLabel:
@@ -171,13 +172,14 @@ func (rt *resourceTracking) SetAppInstance(un *unstructured.Unstructured, key, v
 		if err != nil {
 			return fmt.Errorf("failed to set app instance label: %w", err)
 		}
+		return nil
 	default:
 		err := argokube.SetAppInstanceLabel(un, key, val)
 		if err != nil {
 			return fmt.Errorf("failed to set app instance label: %w", err)
 		}
+		return nil
 	}
-	return nil
 }
 
 // BuildAppInstanceValue build resource tracking id in format <application-name>;<group>/<kind>/<namespace>/<name>
diff --git a/util/kube/kube.go b/util/kube/kube.go
index e32aabac00b63..5ea4394b726f0 100644
--- a/util/kube/kube.go
+++ b/util/kube/kube.go
@@ -4,7 +4,11 @@ import (
 	"fmt"
 	"regexp"
 
+	"github.com/argoproj/gitops-engine/pkg/utils/kube"
 	"k8s.io/apimachinery/pkg/apis/meta/v1/unstructured"
+	"k8s.io/apimachinery/pkg/runtime/schema"
+
+	"github.com/argoproj/argo-cd/v2/common"
 )
 
 var resourceNamePattern = regexp.MustCompile("^[a-z0-9]([-a-z0-9]*[a-z0-9])?$")
@@ -15,6 +19,7 @@ func IsValidResourceName(name string) bool {
 }
 
 // SetAppInstanceLabel the recommended app.kubernetes.io/instance label against an unstructured object
+// Uses the legacy labeling if environment variable is set
 func SetAppInstanceLabel(target *unstructured.Unstructured, key, val string) error {
 	labels, _, err := nestedNullableStringMap(target.Object, "metadata", "labels")
 	if err != nil {
@@ -25,10 +30,75 @@ func SetAppInstanceLabel(target *unstructured.Unstructured, key, val string) err
 	}
 	labels[key] = val
 	target.SetLabels(labels)
+	if key != common.LabelKeyLegacyApplicationName {
+		// we no longer label the pod template sub resources in v0.11
+		return nil
+	}
+
+	gvk := schema.FromAPIVersionAndKind(target.GetAPIVersion(), target.GetKind())
+	// special case for deployment and job types: make sure that derived replicaset, and pod has
+	// the application label
+	switch gvk.Group {
+	case "apps", "extensions":
+		switch gvk.Kind {
+		case kube.DeploymentKind, kube.ReplicaSetKind, kube.StatefulSetKind, kube.DaemonSetKind:
+			templateLabels, ok, err := unstructured.NestedMap(target.UnstructuredContent(), "spec", "template", "metadata", "labels")
+			if err != nil {
+				return err
+			}
+			if !ok || templateLabels == nil {
+				templateLabels = make(map[string]interface{})
+			}
+			templateLabels[key] = val
+			err = unstructured.SetNestedMap(target.UnstructuredContent(), templateLabels, "spec", "template", "metadata", "labels")
+			if err != nil {
+				return err
+			}
+			// The following is a workaround for issue #335. In API version extensions/v1beta1 or
+			// apps/v1beta1, if a spec omits spec.selector then k8s will default the
+			// spec.selector.matchLabels to match spec.template.metadata.labels. This means Argo CD
+			// labels can potentially make their way into spec.selector.matchLabels, which is a bad
+			// thing. The following logic prevents this behavior.
+			switch target.GetAPIVersion() {
+			case "apps/v1beta1", "extensions/v1beta1":
+				selector, _, err := unstructured.NestedMap(target.UnstructuredContent(), "spec", "selector")
+				if err != nil {
+					return err
+				}
+				if len(selector) == 0 {
+					// If we get here, user did not set spec.selector in their manifest. We do not want
+					// our Argo CD labels to get defaulted by kubernetes, so we explicitly set the labels
+					// for them (minus the Argo CD labels).
+					delete(templateLabels, key)
+					err = unstructured.SetNestedMap(target.UnstructuredContent(), templateLabels, "spec", "selector", "matchLabels")
+					if err != nil {
+						return err
+					}
+				}
+			}
+		}
+	case "batch":
+		switch gvk.Kind {
+		case kube.JobKind:
+			templateLabels, ok, err := unstructured.NestedMap(target.UnstructuredContent(), "spec", "template", "metadata", "labels")
+			if err != nil {
+				return err
+			}
+			if !ok || templateLabels == nil {
+				templateLabels = make(map[string]interface{})
+			}
+			templateLabels[key] = val
+			err = unstructured.SetNestedMap(target.UnstructuredContent(), templateLabels, "spec", "template", "metadata", "labels")
+			if err != nil {
+				return err
+			}
+		}
+	}
 	return nil
 }
 
 // SetAppInstanceAnnotation the recommended app.kubernetes.io/instance annotation against an unstructured object
+// Uses the legacy labeling if environment variable is set
 func SetAppInstanceAnnotation(target *unstructured.Unstructured, key, val string) error {
 	annotations, _, err := nestedNullableStringMap(target.Object, "metadata", "annotations")
 	if err != nil {
diff --git a/util/kube/kube_test.go b/util/kube/kube_test.go
index 389a2d0f9870a..51474359bde5e 100644
--- a/util/kube/kube_test.go
+++ b/util/kube/kube_test.go
@@ -84,6 +84,56 @@ func TestSetLabels(t *testing.T) {
 	}
 }
 
+func TestSetLegacyLabels(t *testing.T) {
+	for _, yamlStr := range []string{depWithoutSelector, depWithSelector} {
+		var obj unstructured.Unstructured
+		err := yaml.Unmarshal([]byte(yamlStr), &obj)
+		require.NoError(t, err)
+
+		err = SetAppInstanceLabel(&obj, common.LabelKeyLegacyApplicationName, "my-app")
+		require.NoError(t, err)
+
+		manifestBytes, err := json.MarshalIndent(obj.Object, "", "  ")
+		require.NoError(t, err)
+		log.Println(string(manifestBytes))
+
+		var depV1Beta1 extv1beta1.Deployment
+		err = json.Unmarshal(manifestBytes, &depV1Beta1)
+		require.NoError(t, err)
+		assert.Len(t, depV1Beta1.Spec.Selector.MatchLabels, 1)
+		assert.Equal(t, "nginx", depV1Beta1.Spec.Selector.MatchLabels["app"])
+		assert.Len(t, depV1Beta1.Spec.Template.Labels, 2)
+		assert.Equal(t, "nginx", depV1Beta1.Spec.Template.Labels["app"])
+		assert.Equal(t, "my-app", depV1Beta1.Spec.Template.Labels[common.LabelKeyLegacyApplicationName])
+	}
+}
+
+func TestSetLegacyJobLabel(t *testing.T) {
+	yamlBytes, err := os.ReadFile("testdata/job.yaml")
+	require.NoError(t, err)
+	var obj unstructured.Unstructured
+	err = yaml.Unmarshal(yamlBytes, &obj)
+	require.NoError(t, err)
+	err = SetAppInstanceLabel(&obj, common.LabelKeyLegacyApplicationName, "my-app")
+	require.NoError(t, err)
+
+	manifestBytes, err := json.MarshalIndent(obj.Object, "", "  ")
+	require.NoError(t, err)
+	log.Println(string(manifestBytes))
+
+	job := unstructured.Unstructured{}
+	err = json.Unmarshal(manifestBytes, &job)
+	require.NoError(t, err)
+
+	labels := job.GetLabels()
+	assert.Equal(t, "my-app", labels[common.LabelKeyLegacyApplicationName])
+
+	templateLabels, ok, err := unstructured.NestedMap(job.UnstructuredContent(), "spec", "template", "metadata", "labels")
+	assert.True(t, ok)
+	require.NoError(t, err)
+	assert.Equal(t, "my-app", templateLabels[common.LabelKeyLegacyApplicationName])
+}
+
 func TestSetSvcLabel(t *testing.T) {
 	yamlBytes, err := os.ReadFile("testdata/svc.yaml")
 	require.NoError(t, err)
diff --git a/util/settings/settings.go b/util/settings/settings.go
index 1f036ddeff7c6..8cb1c4df956f5 100644
--- a/util/settings/settings.go
+++ b/util/settings/settings.go
@@ -761,11 +761,6 @@ func (mgr *SettingsManager) GetAppInstanceLabelKey() (string, error) {
 	if label == "" {
 		return common.LabelKeyAppInstance, nil
 	}
-	// return new label key if user is still using legacy key
-	if label == common.LabelKeyLegacyApplicationName {
-		log.Warnf("deprecated legacy application instance tracking key(%v) is present in configmap, new key(%v) will be used automatically", common.LabelKeyLegacyApplicationName, common.LabelKeyAppInstance)
-		return common.LabelKeyAppInstance, nil
-	}
 	return label, nil
 }