AIMS: An alternative to the traditional method for modeling kinematics of the Earth's rotation is proposed. The purpose of developing the new approach is to provide a self-consistent and simple description of the Earth's rotation in a way that can be directly estimated from observations without using intermediate quantities. METHODS: Instead of estimating time series of pole coordinates, differences UT1--TAI, their rates, and daily offset of nutation, it is proposed to estimate coefficients of the expansion of parameters of a small perturbational rotation into basis functions. The resulting transformation from the terrestrial coordinate system to the celestial coordinate system is formulated as a product of an a priori matrix of a finite rotation and an empirical vector of a residual perturbational rotation. In the framework of this approach the specific choice of the a priori matrix is irrelevant, provided the angles of the residual rotation are small enough to neglect their squares. The coefficients of the expansion into the B-spline and Fourier bases together with estimates of other nuisance parameters are evaluated directly from observations of time delay or time range in a single least square solution. RESULTS: This approach was successfully implemented in a computer program for processing VLBI observations. The dataset from 1984 through 2006 was analyzed. It is shown that the new procedure adequately represents the Earth's rotation, including slowly variating changes in UT1-TAI and polar motion, the forced nutations, the free core nutation, and the high frequency variations of polar motion and UT1.