A system and method for controlling a rotating E-machine and for correcting a rotational position signal output by an angular position sensor operatively connected to the E-machine in conjunction with a sensor digital converter is disclosed. For each angular operating speed of interest, a set of signals as a function of position is taken such that the harmonics (or sub-harmonics) related to the position sensor may be determined and isolated from errors due to an associated digital converter. From this information, the magnitude and phase of the position sensor harmonics is determined. The effects of the sensor digital converter (or other signal processing equipment) are then determined and accounted for, allowing the control system to apply the total position error signal to the position sensor output signal to determine a corrected position sensor signal for use in controlling the E-machine.