Good info here for any diplomat frustrated with skill-up rates :
There is a hidden experience amount you earn with each parley that is based on your relative skill level compared to that of the skill of the conversation. When you “level” you get a skill point.
Thus, it’s a hybrid system between the levelling you know and love so well and the skill system you know and love so well.
So it is in fact a “levelling” system, but missing the XP bar. No reason to feel helpless about skillup rates; every successful parley gives you some XP, although you don’t get to see how much it is. Here’s hoping that’s the NEXT thing they patch in – a diplomacy XP bar.