A method for controlling a powertrain of a vehicle includes calculating, via a controller, an optimal torque target for the powertrain as a function of system limits of the vehicle. The method includes commanding, via transmission of an output torque signal, an actual output torque of the powertrain to pursue or follow the calculated optimal torque target during a steady-state torque request condition. Additionally, the method includes detecting a predetermined vehicle event during the steady-state torque request condition, and shaping the output torque signal via the controller. A variable gain factor may be used in response to detection of the predetermined vehicle event to allow the output torque signal to temporarily deviate from the calculated optimal torque target during the steady-state torque request condition. A powertrain has an engine, an electric machine, and a controller programmed to execute the method.