The velocity resolution of an incremental encoder depends on the method that is employed to determine velocity.
Since the pulse-counting method and the pulse-timing method are both based on counting, the velocity resolution is given by the change in angular velocity that corresponds to a change (increment or decrement) in the count by one.
For the pulse-counting method that a unity change in the count n corresponds to a speed change of
where N is the number of windows in the code track and T is the time period over which a pulse count is read.
Note that the engineering value (in rad/s) of this resolution is independent of the angular velocity itself, but when expressed as percentage of the speed, the resolution becomes better (smaller) at higher speeds. that the resolution improves with the number of windows and the count reading (sampling) period. Under transient conditions, the accuracy of a velocity reading decreases with increasing T.
This is true because, when N is increased the pulse period shortens and hence the number of clock cycles per pulse period also decreases. The resolution can be improved, however, by increasing the clock frequency.