No, the IRR isn't how your funds are performing in the market unless you are putting in the max on Jan. 1 and then not adding or removing anything for the year so that it matches the total return of the fund.
It's a computation of what is your personal rate of return in terms of how much money have you put in, which is beginning balance plus contributions, compared to the ending balance factoring in any withdrawals. Thus it is how much each dollar you invested did over the course of the period that the return is given.
Something to point out here is that if you are dollar-cost averaging then the IRR is a better measure of how your performance is as it isn't quite the same as the total return of the fund.
Consider the case of a fund that goes up 10% each month and you invest $100/month into the fund for an entire year, just to keep the Math simple here.
The fund's total return is (1.1)^12 = 3.138428376721 which is 214%. So, if you invested $1200 at the start of the year, you'd have $3766.11 at the end of the year for a gain of $2566.11.
However, if we space out the computations, the end total becomes a mere $2352.27, for a gain of $1152.27, as the compounding is reduced. Thus, in this case your IRR is 96% since you invested $1200 and made $1152.27 on it.
For those wanting the raw figures, here is the $100/month returns at the end of each month:
In contrast, here is how the $1200 invested as a lump sum, does:
As the final totals are rather different, the rate of returns should also be quite different. The total returns are different because in one case, the person spaced out the purchases compared to the other case. These shouldn't both have the same return unless you're going to factor in the time value of money somehow to make up the difference.