Digital scales for servo positioning.

Hi, I'm new to the group. I have a mill and a lathe with "Easson"
digital scales and I would like to use the scales for the positioning
feedback function as this would eliminate backlash issues and missed
steps. Has anyone used this method ?
I would also like to use an encoder on the lathe spindle for feed
rates per revolution and threading. Can anyone point me to a block
diagram or schematic, preferably with specifications ?
Glen