Back in the tool room we always measured off cast tables,using a micrometre 2 matching sized parallel bars were sized and the subject was placed on top of them,then the vernier height was measured,this was then reduced by the pre measured bar height.In this way the wear on the vernier base and pointer was taken into account.For greater accuracy the pointer was replaced with a dial gauge.Properly set up the vernier and dial gauge could be zeroed of the surface table then gauged to height.Hope that helps.

I suspect you measure the rod, then use the caliper to measure the rod (which is in the hole) plus the material, then subtract the rod length.

The Vernier slide assembly moves as a unit along the graduations of the bar to bring both jaws in contact with the work. Readings are taken in thousandths of an inch by reading the position of the Vernier plate in relation to the graduations on the stationary bar.

The modern Vernier gages feature an improved long Vernier with 50 divisions instead of the older style with 25 divisions. However there are still Vernier gages with 25 divisions used in manufacturing and it is important that the user is able to read the 50 and the 25 division gages. The 50 division Vernier plate, with widely spaced, easy-to-read graduations and in combination with half as many bar graduations as previous old style instruments, make possible faster, more accurate and greatly simplified readings without a magnifying glass.

For additional information please refer to the document cited in the sources section.