An encoder sends out a stream of 0V to 5V pulses as it rotates...Don;t look for anything voltages in between. They are digital not analog.. Not sure about the KOP encoder but typically you get 1024 pulses per revolution. .Your code counts pulses and the time between the pulses to get the information it needs. And there are 2 channels putting out pulses but they are out of phase with each other. Using that difference you can determine the direction the axis is turning. Use an oscilloscope to test the outputs and observe the pulse train...

BC