VMware Fusion 12.1.0 Big Sur Host - Windows 10 Guest was driving me nuts as it was so slow and laggy. Windows 7 guest on the other hand runs very snappy. In Fusion 10 it was enough to keep the virtual machine on an SSD to speed things up but it didn't make any difference with Fusion 12. The solution was to edit the .vmx config file and add these lines if they don't already exist taken from https://communities.vmware.com/t5/VMware-Fusion-Discussions/Guest-OS-s-get-unusably-slow-after-a-few...
mainMem.backing = "swap"
sata0:0.virtualSSD = 1
MemTrimRate = "0"
sched.mem.pshare.enable = "FALSE"
Now performance is snappy and nearly as fast as running in Bootcamp.