Both fail to acknowledge one's own depravity. Calvin said that a definition of regeneration could be gathered from this verse. As the old man is known by his works so we must recognize the old man in us. We see him every time we think we are as good as we need to be. God did not create only part of us, and He does not renew only part of us.
Legalistic obedience claims that externals are the essence of sanctification.
God's purpose for His chosen is to be regenerated into a new man, a new creature in Jesus Christ who can display God's mercy to others. They are wrong in not recognizing obedience as the beginning of our sanctification. But neither this or all the other case laws can cover every possible means of larcenous activity. Mortifying our members means recognizing that save for God's grace and Spirit in our lives our larcenous old man could get the better of us. We therefore actively seek how we can be honest and just in our dealings with employees and all others.