Most people think that Karma is kind of like fate, that "what goes around comes around" like the Wheel of Fate in Tarot cards. That isn't what Karma is. Karma is a far more nuanced and subtle concept than that, and is interpreted very differently in the 4 major religions that teach it, namely Hinduism, Jainism, Buddhism and Sikkhism. It is primitive to merely view Karma as an extension of reciprocity i.e. do good things, receive good outcomes, or the reverse. My understanding of Karma primarily comes from Buddhism and what I learned of the Buddhist perspective on the idea was at very least interesting and worth relaying I think. I would not pretend that my understanding is in any way perfect or exhaustive on the subject however.
Karma is about the consequences of our actions. The relationship of karma to ethics is important, but there is an important element that is often missed. Buddhist ethics are not Christian ethics; they are similar in some ways, but not the same. As a result, the Christian ethic of "give until it hurts" is not mirrored in Buddhism as a path to salvation. Buddhists believe in compassion, but that compassion also applies to yourself (a point of radical departure from Jainism which is very destructive of one's body thru austerities). Instead Buddhism teaches that the fundamental cause of the world's suffering is ignorance, and this is best overcome by cultivating wisdom.
Consider that it is quite possible to perform what appear to be overtly ethical acts that are actually Karmically bad, for example, if you go out of your way to help bad people in an ethical manner, the result will almost certainly be perverted by the people you help. Naive altrusim isn't the same as being good, it is frequently the same as being victimized. You don't help snakes without taking precautions against being bitten and poisoned. There is no sin in altruism, the sin is in the naivety. It is worth noting that Christianity doesn't consider stupidity to be a sin (is that a surprise?), but really, how much damage is done by people who don't consider the consequences of their actions? I might go as far as to suggest "most", as it is very hard to properly understand all the factors affecting a descision we may make, but that is what separates the wise from the foolish.
It is also worth mentioning that the Karma we choose creates Karmic attachments. In this sense, our Karma becomes defined by what we choose to desire and the way we go about achieving our desires. What is not obvious, is that this extends to our senses. Yes, our very senses of sight, hearing, touch, olfactory etc are all Karmic attachments. After all, unless we were attached to eyesight, we could not be attached to beauty, which is the pleasure of the eyes etc. This accounts for something quite Fortean, namely, how a disembodied spirit is apparently able to see, when it has no physical eyes; the Karmic accretion of sight remains with the spirit body.
So what about bad people? It is quite possible to have plenty of wisdom but little compassion. Life will also afford most people ample opportunities to behave very selfishly with no overtly negative consequences. Of course such behavior is habit forming, and habit is a form of Karma. Eventually if you neglect compassion, you will cut yourself off from the company of good and trustworthy people, and find yourself swimming only with the other sharks. Worse still, you may be so far gone that you may not even realise what a horrible situation it is you find yourself in. It is much like that of leprosy, constantly checking yourself for lesions (holes in your position that can be exploited), never able to truly rest, and always having to struggle for diminishing returns as a social outcast despite potentially having superior status.
Note that I haven't even begun to talk about how Karma affects reincarnation, and while I could, I think most people know that bit to some degree at least. What they don't often see, is how Karma affects their day to day life, and that is what I have been trying to illustrate.