A laser Doppler encoder includes a set of prisms mounted on a fixed base along with an additional prism, an end retroreflector and a laser/detector and a second set of prisms mounted on a moving/rotating base. The laser/detector generates a laser beam that is transmitted through the sets of prisms on the fixed and moving bases as well as the additional prism and the end retroreflector until the laser beam finally reaches a heterodyning detector that is housed coaxially inside the laser/detector. The laser beam is a frequency-stabilized laser beam such that the laser beam that is reflected back to the heterodyning detector is frequency-shifted by the movement of the moving base relative to the fixed base so that the amount of movement (either rotational or linear) of the moving base can be accurately determined. Moreover, the end retroreflector enables the laser Doppler encoder to be readily self-aligned such that the alignment time is substantially reduced and the three-dimensional optical path configuration results in a compact and integrated optical design which optimizes the system's anti-vibration performance. The laser Doppler encoder can be used in conjunction with a high energy resolution monochromator for accurately determining the rotational movement of an arm in the monochromator or can be used in conjunction with a closed looped motion controller for providing feedback on the rotational displacement of the arm of the monochromator so that the arm can be accurately positioned.