N. T. Wright argues that when Paul uses the term "justification" he means that God has declared a person to be a full member of the people of God (or a citizen of the Kingdom and a loyal follower of King Jesus) but that person only remains a member of the people of God by doing good works. Wright argues that Paul is clear that we are all judged on the totality of the life lived (see Rom. 14:10-12) and that God will specifically judge us according to our works, both good and bad (Rom. 2:6 and 2 Cor. 5:10).
Classical Reformed scholars argue that good works are a sign that a person has been saved by God, not a way to earn salvation in any way, shape or form. They counter that what Paul means when he speaks of good and bad deeds is the rewards (or lack thereof) bestowed on a Christian in the new Heavens and New Earth (1 Cor. 3:12-15; 2 Cor. 5:9-10 and Romans 14:10-12). They argue that we are all saved solely by grace in our election and that Jesus paid the price for our sins breaking its power over us and then granting us his status on judgment day which allows us to stand in the Holy presence of God (a doctrine known as imputed righteousness). Rewards are doled out by our savior later on according to how we have multiplied the talents allotted each of us.
In all fairness, the Reformed view with its emphasis on imputed righteousness is certainly the orthodox view (i.e., one traced back to the early church) and many of the verses Wright cites can fairly be interpreted as referring to rewards in the next life not as actions which keep us from losing eternal life. However, there are verses like Matthew 25:31-46, and, to a certain extent, Romans 2:6, which seem to support Wright's view.
Yet, on the other hand, Wright's contention that to be "justified" means a person "is in the covenant community" has no warrant outside of Scripture and little warrant within. There is simply no extra-Biblical texts to support Wright's reading that "justification" was ever read in such a way (as a side note, non-Biblical texts is a key scholars use to know how to interpret certain Greek and Hebrew words and phrases used by the inspired authors of Scripture).
Believe it or not this whole debate actually began back in the early 1960's with the publication of an article by the dean of Harvard Divinity School and continues to "rage" at scholarly conferences. Perhaps the truth will not come out until both sides admit their own weaknesses and work with the other for resolution. Reformed scholars need to admit that several verses do seem to support Wright's contention that we are all judged by our deeds not by Christ's righteousness and Wright needs to admit that "justification" = "welcome to the family" is a bit of a stretch.
Confused? Hey, who said the thoughts of God were easy to understand!!!