Reformed theology teaches that, for the elect, the purpose of the eschatological judgment "according to works" is to determine degrees of rewards — not to determine whether we shall inherit eternal life, nor to pronounce a second justification, nor to prove that God's verdict of justification is just and in accordance with the truth.
We believe that this true faith, produced in man by the hearing of God's Word and by the work of the Holy Spirit, regenerates him and makes him a "new man," (2 Cor. 5:17) causing him to live the "new life" (Rom. 6:4) and freeing him from the slavery of sin.
Therefore, far from making people cold toward living in a pious and holy way, this justifying faith, quite to the contrary, so works within them that apart from it they will never do a thing out of love for God but only out of love for themselves and fear of being condemned.
So then, it is impossible for this holy faith to be unfruitful in a human being, seeing that we do not speak of an empty faith but of what Scripture calls "faith working through love," (Gal. 5:6) which leads a man to do by himself the works that God has commanded in his Word.
These works, proceeding from the good root of faith, are good and acceptable to God, since they are all sanctified by his grace. Yet they do not count toward our justification — for by faith in Christ we are justified, even before we do good works. Otherwise they could not be good, any more than the fruit of a tree could be good if the tree is not good in the first place.
So then, we do good works, but nor for merit — for what would we merit? Rather, we are indebted to God for the good works we do, and not he to us, since it is he who "works in us both to will and do according to his good pleasure" (Phil. 2:13) — thus keeping in mind what is written: "When you have done all that is commanded you, then you shall say, 'We are unworthy servants; we have done what it was our duty to do.' " (Luke 17:10)
Yet we do not wish to deny that God rewards good works — but it is by his grace that he crowns his gifts.
Moreover, although we do good works we do not base our salvation on them; for we cannot do any work that is not defiled by our flesh and also worthy of punishment. And even if we could point to one, memory of a single sin is enough for God to reject that work.
So we would always be in doubt, tossed back and forth without any certainty, and our poor consciences would be tormented constantly if they did not rest on the merit of the suffering and death of our Savior.
Salvation — the salvation of Paul and the penitent thief — is entirely of grace, the rewards of the heavenly state are all purchased by the merit of Christ alone; but the proportion in which the rewards will be administered to individuals will be determined by fatherly justice in accordance with the fidelity of the saints on earth.
In this paternal rule over God's own house there is no element of retribution. The government is wholly disciplinary. Punishment gives way to chastisement. The Ruler and Judge is both Father and Saviour.
It is needless to say that this sort of probation is not legal in the sense that it is in order to justification. Justification is presupposed. Nor is it in order to salvation. It is in order to the degree in which glory shall be experienced.
(Calvinism and Evangelical Arminianism, pp. 464-65)
While it makes void the gospel to introduce works in connection with justification, nevertheless works done in faith, from the motive of love to God, in obedience to the revealed will of God and to the end of his glory are intrinsically good and acceptable to God. As such they will be the criterion of reward in the life to come. This is apparent from such passages as Matthew 10:41; 1 Corinthians 3:8-9, 11-15; 4:5; 2 Corinthians 5:10; 2 Timothy 4:7.
We must maintain therefore, justification complete and irrevocable by grace through faith and apart from works, and at the same time, future reward according to works. In reference to these two doctrines it is important to observe the following:
(Collected Writings, vol. II, p. 221)
There is that in the Scripture assigned unto our first justification, if they will needs call it so, as leaves no room for their second feigned justification; for the sole foundation and pretence of this distinction is the denial of those things to belong unto our justification by the blood of Christ which the Scripture expressly assigns unto it. Let us take out some instances of what belongs unto the first, and we shall quickly see how little it is, yea, that there is nothing left for the pretended second justification. For,
And if there be anything now left for their second justification to do, as such, let them take it as their own; these things are all of them ours, or do belong unto that one justification which we do assert. Wherefore it is evident, that either the first justification overthrows the second, rendering it needless; or the second destroys the first, by taking away what essentially belongs unto it: we must therefore part with the one or the other, for consistent they are not.
(Works, vol. V, pp. 142-43)
On the General Judgment:
The book of the law shall be opened. This book is the standard and rule, by which is known what is right and what is wrong; as also, what sentence is to be passed accordingly on those who are under it …
But what seems principally pointed at by the opening of this book, is the opening of that part of it which determines the reward of men's works. Now the law promises life, upon perfect obedience: but none can be found on the right hand, or on the left, who will pretend to that, when once the book of conscience is opened. It threatens death upon disobedience, and will effectually bring it upon all under its dominion. And this part of the book of the law, determining the reward of men's works, is opened, only to show what must be the portion of the ungodly, and that there may be read their sentence before it is pronounced. But it is not opened for the sentence of the saints; for no sentence absolving a sinner could ever be drawn out of it.
The law promises life, not as it is a rule of actions, but as a covenant of works; therefore innocent man could not have demanded life upon his obedience, till the law was reduced into the form of a covenant, as was shown before. But the saints, having been, in this life, brought under a new covenant, namely, the covenant of grace, were dead to the law as a covenant of works, and it was dead to them. Wherefore, as they shall not now have any fear of death from it, so they can have no hope of life from it, since 'they are not under the law, but under grace' (Rom. 6:14).
But, for their sentence, 'another book is opened' … 'Another book' shall be 'opened, which is the book of life' (Rev. 20:12). In this the names of the elect are written, as Christ said to His disciples (Luke 10:20), 'Your names are written in heaven.' This book contains God's gracious and unchangeable purpose, to bring all the elect to eternal life; and that, in order thereto, they be redeemed by the blood of His Son, effectually called, justified, adopted, sanctified, and raised up by Him at the last day without sin. It is now lodged in the Mediator's hand …
Then shall the Judge pronounce this blessed sentence on the saints, 'Come, ye blessed of my Father, inherit the kingdom prepared for you from the foundation of the world' (Matt. 25:34) … This sentence is passed on the saints, 'according to their works' (Rev. 20:12); but not for their works, nor for their faith, as if eternal life were merited by them …
They were redeemed by the blood of Christ, and clothed with His spotless righteousness, which is the proper cause of the sentence …
And the saints will so far be judged according to such works, that the degrees of glory amongst them shall be according to these works. For it is an eternal truth, 'He that soweth sparingly, shall reap also sparingly' (2 Cor. 9:6). Thus shall the good works of the godly have a glorious, but a gratuitous reward; a reward of grace, not of debt; which will fill them with wonder at the riches of free grace, and at the Lord's condescending to take any notice, especially such public notice, of their poor worthless works.
( Human Nature In Its Fourfold State, pp. 413-18)