The present principles provides a method and apparatus for jointly adjusting the rounding offset and the quantization step size on a macroblock level to improve the perceptual quality of the fine details of the encoded image. In one implementation, the content of the pictures is analyzed and the smooth regions are identified. A quantization step size value for the picture is initially defined and a rounding offset is adaptively assigned to each macroblock based on the content characteristics. The quantization step size is then calculated for the a particular macroblock according to another content characteristic of the macroblock such that the encoding of the particular macroblock is performed in response to the calculated quantization step size and the rounding offset value of the first block.