Hello Sir,
First of all, K5 is a 3.3V standard connector, so please make sure that the voltage does not go over 3.5V.
For the issue of noise on the encoder channels, you can go to the Plugin configuration (Config->Config Plugins->HiCON Plugin). On the "system" tab page, try setting the encoder debounce to a higher value. To further reduce the noise, you may add 2.2K pull-up and pull-down resistors on the A, B, and Z signals.
Hope this helps.
- Marc