The best way to level your merc is to level yourself up first
(without a merc) Then when you're say.. lvl 70+
(your merc will never be over your own level) get a merc at whatever lvl is high enough for you

give him the strongest wep you have to give him then let him kill around.
The way I used to do was after hiring him @ roughly around lv. 80+ I'd give him an eDoom (runeword)

then opened hell cows, and let him kill around. If he gets low on health, use a tp, heal and repeat.
Same process goes for any difficulty you're currently at.