An approach is presented to describe the functional and mechanical behaviour of FeMn-based shape memory alloys undergoing fcc - hcp phase transformation. The multi-variance of the reverse transformation is taken into consideration. The martensitic transformation and the micro plastic deformation due to the plastic accommodation of martensite are considered on the microscopic level. The micro plastic deformation is described from the point of view of the plastic flow theory. Isotropic hardening and kinematic hardening are taken into account and are related to the densities of scattered and oriented deformation defects. The thermodynamic forces causing growth of martensite and reversible deformation defects are the derivatives of the Gibbs’ potential on the respective internal variables. The macro deformation of the representative volume of the polycrystal is calculated by averaging all micro strains. The results show a good qualitative agreement with available experimental data.