The grinding process is one of the most important finishing processes in production industry. During the grinding process the workpiece is subjected to mechanical and thermal loads. They can induce thermal damages in terms of phase transformation due to critical temperature history. A holistic model helps to describe and predict the influence of these loads on the residual stresses in the surface layer. In this paper, a very promising approach using the Finite Element Method (FEM) to simulate the surface grinding process in terms of thermal and mechanical loads during grinding of hardened and tempered steels with vitrified bonded CBN grinding wheels is introduced. The investigations were conducted for deep, pendulum and speed stroke grinding. The change of workpiece material properties was modelled as a function of temperature and phase history. The results lead to the necessary time depending temperature distribution within the surface layer. Hence, the phase transformation can be calculated. The FEM software "Sysweld" was used to analyze the phase transformation kinetics. Hence, the size of the rehardened zone after grinding can be predicted. The evaluation of the FEM model with micrographs of ground workpiece specimens showed a strong correlation for different grinding parameters. Based on the understanding of mechanical and thermal loads as well as phase transformation kinetics in the surface layers the resulting residual stresses can be determined.