I have struggled with this. I don’t like the DM having to track minute calculations (like amount of loot gained, hit dice of monsters killed, and subsequent math to divvy up experience.) I understand why D&D bases experience on loot first, with monster slaying a distant second, but man… I don’t like it.
Okay then, what will I do instead? I messed about with several iterations and attempts to arrive at a simple experience system that was flexible enough to reward desired character behavior, but nuanced enough to support games that were more than killing and looting.
I ended up with something that rewards characters based on the difficulty of what they do, scaled by level. Also, provisions for spending money for fleeting or more substantial advantages. Also, provisions for making money at down-time occupation. Finally, a sweet little bonus of giving players some experience they can keep or share, when they level.
What do you think?