A simulation of the induction motor is developed that accurately models the skin effect in the rotor bars. The model is used to show the degradation in performance of a vector-controlled induction motor due to the skin effect and is verified experimentally. Because of the transient nature of the error, standard compensation schemes operating over long time periods are ineffective. A simple compensation scheme is developed and shown experimentally to give considerable improvement in performance of the vector-controlled induction motor under torque control. This is easily implemented and imposes a minimal computational overhead