I think there are benefits to formalizing expectations (and what it means to exceed them) but yes, you can communicate that just by having a conversation. In fact the conversation is essential, a formal career ladder is just a tool.
I would say that the times in my career that I have had the most success were the times that titles didn't matter at all: what mattered was that I was doing hard, essential work as part of a highly-aligned team that was solving problems that impacted the business.
But eliminating job titles won't make those kind of situations happen, and having job titles doesn't prevent it. I've been in an organization that tried to just eliminate title differentiation, and it didn't work very well.
Let me change focus for a bit, and instead I'll address what I think would be necessary to successfully create a flat organization. The only way to make people comfortable with eliminating job title as a status marker is if they possess other status markers that are as strong (or stronger) than a title.
At a minimum, I think you would need to:
1) pay top-of-market salaries
2) fire anyone who isn't an exceptional performer
From what I've heard, Netflix is a pretty flat company, and they (claim to) do both of those things. Obviously there is more to it than just that, and I wouldn't recommend cargo-culting them, but I think they serve as a useful example.